Rule 237 of Income explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Rule 237 of the Income-tax Rules, 2026 requires the statement of financial transaction under section 508(1) to be furnished in Form No. 165, by 31 May following the financial year, to the Director or Joint Director of Income-tax (Intelligence and Criminal Investigation), under the digital signature of a Designated Director. It replaces rule 114E and Form 61A.
The reporting Table — sub-rule (2)
The statement is furnished by every person in column 4 in respect of transactions of the nature in column 2 and the value in column 3, which are registered or recorded by him.
Sl. No. 1 — banking transactions
| Item | Nature | Threshold |
|---|---|---|
| (a) | Cash payment for purchase of bank drafts, pay orders or banker's cheques | In one or more accounts of a person, aggregating in a financial year to Rs 10 lakh or more for a person having a PAN, or Rs 5,00,000 or more for a person not having a PAN |
| (b) | Payments in cash or otherwise for purchase of pre-paid instruments issued by the Reserve Bank of India under section 18 of the Payment and Settlement Systems Act, 2007 | Aggregating to Rs 10 lakh or more during the financial year |
| (c) | Cash deposits or cash withdrawals, including through bearer's cheque, in or from one or more current accounts | Aggregating to Rs 50 lakh or more in a financial year |
Reporting person: a banking company or co-operative bank to which the Banking Regulation Act, 1949 applies, including any bank or banking institution referred to in section 51 of that Act.
Sl. No. 2 — cash deposits in non-current, non-time-deposit accounts
Cash deposits in a financial year in one or more accounts of a person, other than a current account and a time deposit, aggregating to Rs 10 lakh or more for a person having a PAN or Rs 5,00,000 or more for a person not having a PAN.
Reporting person: a banking company or co-operative bank as above; or the Post Master General as referred to in section 2(j) of the Indian Post Office Act, 1898 as it existed prior to its repeal, or the Regional Head as referred to in the Post Office Rules, 2024 framed under the Post Office Act, 2023.
Sl. No. 3 — time deposits
One or more time deposits of a person, other than a time deposit made through renewal of another time deposit, aggregating to Rs 10 lakh or more in a financial year.
Reporting person: a banking company or co-operative bank; the Post Master General or Regional Head; a Nidhi referred to in section 406 of the Companies Act, 2013; or a non-banking financial company holding a certificate of registration under section 45-IA of the Reserve Bank of India Act, 1934 to hold or accept deposits from the public.
Sl. No. 4 — credit card bill payments
Payments made by any person against bills raised in respect of one or more credit cards issued to that person, aggregating to Rs 1,00,000 or more in one mode and Rs 10 lakh or more by any other mode.
The text layer does not carry the description of the first mode in full. Read Sl. No. 4, column 3 of the rule 237 Table before applying the Rs 1,00,000 limb.
Reporting person: a banking company or co-operative bank as above, or any other company or institution issuing a credit card.
Sl. Nos. 5 to 8 — securities and foreign currency
| Sl. | Transaction | Threshold | Reporting person |
|---|---|---|---|
| 5 | Receipt for acquiring bonds or debentures, other than amounts received on renewal of a bond or debenture issued by that company | Rs 10 lakh or more in a financial year, per person | The company or institution issuing bonds or debentures |
| 6 | Receipt for acquiring shares, including share application money | Rs 10 lakh or more in a financial year, per person | A company issuing shares |
| 7 | Buy back of shares from any person, other than shares bought in the open market | Amount or value aggregating to Rs 10 lakh or more in a financial year | A company listed on a recognised stock exchange purchasing its own securities under section 68 of the Companies Act, 2013 |
| 8 | Receipt for sale of foreign currency, including credit of such currency to a foreign exchange card or expense in such currency through a debit or credit card, traveller's cheque, draft or other instrument | In one or more accounts of a person, aggregating to Rs 10 lakh or more for a person having a PAN, or Rs 5,00,000 or more for a person not having a PAN | An authorised person as referred to in section 2(c) of the Foreign Exchange Management Act, 1999 |
Sl. No. 9 — registration of immovable property
Reported where the amount is Rs 45 lakh or more, or the stamp duty value referred to in section 2(105) of the Act is Rs 45 lakh or more.
Reporting person: the Inspector-General appointed under section 3 of the Registration Act, 1908, or the Registrar or Sub-Registrar appointed under section 6 of that Act.
The Rs 45 lakh figure matches the property threshold in rule 159 for PAN quoting, so the same transaction that requires a PAN at the counter is the one the registrar reports.
Sl. Nos. 10 to 12
Sl. No. 10 concerns the purchase of stamp paper. The value column for Sl. No. 10, and the whole of Sl. Nos. 11 and 12, do not survive the published text layer of the book. Read the Table in sub-rule (2) directly for those rows. This article does not reconstruct them. Their existence is confirmed by sub-rule (3), which excludes Sl. Nos. 9, 10 and 12 from the aggregation rules.
How thresholds are aggregated — sub-rule (3)
Every reporting person in column 4 other than those at Sl. Nos. 9, 10 and 12 shall, in determining the threshold:
- (a) take into account all the accounts of the same nature maintained in respect of that person during the financial year;
- (b) aggregate all the transactions of the same nature recorded or maintained in respect of that person during the financial year;
- (c) where the account is maintained or the transaction recorded in the name of more than one person, attribute the entire value to all the persons; and
- (d) apply the threshold separately to deposits and withdrawals for the current account transactions at Sl. No. 1(c).
For a joint account, the entire value is attributed to each holder — not split between them. Two joint holders of an account with Rs 12 lakh of qualifying cash deposits are each reported at Rs 12 lakh. Systems built to divide a joint account's value by the number of holders under-report on the face of the rule.
How the statement is filed — sub-rule (4)
Form No. 165 is furnished to the Director of Income-tax (Intelligence and Criminal Investigation) or the Joint Director of Income-tax (Intelligence and Criminal Investigation), through online transmission of electronic data to a designated server, under the digital signature of the person specified in sub-rule (8), and in accordance with the data structure specified by the Principal Director General of Income-tax (Systems).
For a reporting person being a Post Master General, Registrar or Inspector General, the form may be furnished in computer readable media, including a Compact Disc or DVD, along with the verification in Form-V on paper.
The Board may designate an officer not below the rank of Joint Director of Income-tax as the Information Statement Administrator for day-to-day administration.
The due date — sub-rule (5)
On or before 31 May immediately following the financial year in which the transaction is registered or recorded.
The trigger is the year of registration or recording, not the year of payment or of contract. For a registrar, that is the year of registration; for a bank, the year the transaction hit the account.
The pre-filling feed — sub-rule (6)
Separately, for the purposes of pre-filling the return of income, a statement under section 508(1) is furnished for the following, in the form, frequency and manner specified by the Principal Director General or Director General of Income-tax (Systems) with the Board's approval:
| Sl. | Nature of transaction | Value | Reporting person |
|---|---|---|---|
| 1 | Capital gains on transfer of listed securities or units of Mutual Funds | All transactions | A recognised stock exchange; a depository as defined in section 2(1)(e) of the Depositories Act, 1996; a recognised Clearing Corporation; or a Registrar to an issue and share transfer agent registered under section 12(1) of the SEBI Act, 1992 |
| 2 | Dividend distributed | All transactions | A company |
| 3 | Interest paid or credited | All transactions | A banking company or co-operative bank; the Post Master General or Regional Head; or an NBFC holding a section 45-IA certificate to hold or accept public deposits |
The sub-rule (6) Table has no monetary threshold. Every dividend a company distributes, every rupee of interest a bank pays or credits, and every capital gain on a listed security or mutual fund unit is reported. This is the feed behind pre-filled returns and the Annual Information Statement under rule 245, and it is why a taxpayer's pre-filled data can contain items far below any reporting limit.
Governance — sub-rules (7) and (8)
- Every reporting person in either Table must communicate to the Principal Director General of Income-tax (Systems) the name, designation, address and telephone number of the Designated Director and the Principal Officer, and obtain a registration number.
- It is the duty of every reporting person, its Designated Director, Principal Officer and employees to observe the procedure and manner of maintaining information specified by its regulator, and to ensure compliance with section 508 and rules 159, 160, 161 and 237.
- The statement is signed, verified and furnished by (a) a person holding a valid power of attorney from the Designated Director where the reporting person is a non-resident, and (b) the Designated Director in all other cases.
Who is the Designated Director — sub-rule (9)(a)
| Reporting person | Designated Director |
|---|---|
| Company | The Managing Director or a whole-time Director as defined in the Companies Act, 2013, duly authorised by the Board of Directors |
| Partnership firm | The managing partner |
| Proprietorship concern | The proprietor |
| Trust | The managing trustee |
| Unincorporated association, body of individuals or any other person | The person or individual who controls and manages the affairs of the reporting entity |
The Designated Director is defined as the person designated to ensure overall compliance with section 508 and rules 159, 160 and 237. It is a compliance office, not a signing convenience — and for a company it must be a Managing Director or whole-time Director with a Board authorisation behind the designation.
Other definitions — sub-rule (9)
- "digital signature" — issued by a Certifying Authority authorised by the Controller of Certifying Authorities.
- "listed securities" — securities listed on any recognised stock exchange in India.
- "Mutual Fund" — as referred to in Schedule VII(20) and (21) of the Act.
- "Principal Officer" — an officer designated by the reporting person.
- "recognised clearing corporation" — as in regulation 2(1)(o) of the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012.
- "Regulator" — the person, authority or Government vested with the power to license, authorise, register, regulate or supervise the reporting person's activity.
Rule 114E and rule 237 compared
| Point | Rule 114E (1962) | Rule 237 (2026) |
|---|---|---|
| Parent provision | Section 285BA | Section 508 |
| Statement form | Form 61A | Form No. 165 |
| Due date | 31 May | 31 May |
| Property threshold | Rs 30 lakh | Rs 45 lakh — amount or section 2(105) stamp duty value |
| Post office reference | Indian Post Office Act, 1898 | Also the Regional Head under the Post Office Rules, 2024 |
| Pre-filling feed | Added by later notification | Built in at sub-rule (6) |
| Related declaration rules | Rules 114B to 114D | Rules 159, 160 and 161 |
Compliance checklist
- Register the Designated Director and Principal Officer with the Principal Director General (Systems) and obtain the registration number.
- Confirm the Designated Director meets the sub-rule (9)(a) test for the entity type, with a Board authorisation where it is a company.
- Aggregate across all accounts of the same nature and all transactions of the same nature.
- Attribute the entire value to every joint holder.
- Apply the Sl. No. 1(c) Rs 50 lakh limit separately to deposits and to withdrawals.
- Distinguish the PAN and no-PAN thresholds at Sl. Nos. 1(a), 2 and 8.
- Exclude renewals from the time deposit and bond or debenture rows.
- Run the sub-rule (6) feed on all transactions, with no threshold.
- File Form No. 165 by 31 May, under digital signature, to the Director or Joint Director (Intelligence and Criminal Investigation).
- Read Sl. Nos. 10 to 12 of the sub-rule (2) Table in the book.
Common mistakes
- Splitting a joint account's value between holders.
- Netting current account deposits against withdrawals instead of testing each at Rs 50 lakh.
- Applying the Rs 10 lakh threshold to a customer with no PAN, where the limit is Rs 5,00,000.
- Reporting renewed time deposits or renewed bonds and debentures.
- Applying a threshold to the sub-rule (6) pre-filling feed.
- Signing with an officer who is not the Designated Director, or without a power of attorney where the reporting person is a non-resident.
- Using the old Rs 30 lakh property threshold.