CBDT Introduces SFT-2517: The Invisible Hand That’s About to Pre-Fill Your Client’s Capital Gains
It is a Tuesday afternoon in October 2026. Your client calls — slightly puzzled, slightly annoyed.
“CA Saab, my AIS already shows my capital gains from shares — with exact dates, acquisition prices, holding periods, everything. I haven’t given this information to anyone. How does the Income Tax Department know all this?”
You take a breath. You have a two-minute story to tell him. And after you do, he will never look at his demat account the same way again.
What Changed — and What Now Requires Reporting
CBDT has issued Notification No. 1 of 2026 (September 2026), prescribing a new Statement of Financial Transaction called SFT-2517. It is specifically designed for depository participants — NSDL and CDSL registered entities — and it governs the reporting of transactions involving:
- Capital gains on transfer of listed securities (shares, debentures, bonds, etc.)
- Capital gains on transfer of Mutual Fund units
The purpose is straightforward: give the Income Tax Department high-quality, pre-verified data so that your client’s ITR capital gains schedule can be pre-filled — accurately, automatically.
Section 508(1), Income-tax Act, 2025 read with Rule 237(6) of the Income-tax Rules:
Every specified person (including a depository participant) shall furnish a statement of financial transaction in such form, manner and within such time as may be prescribed, in respect of the transactions specified therein.
The Mechanics — How the Reporting Actually Works
SFT-2517 follows a half-yearly cycle, not annual. This is deliberate — it keeps the AIS data current and reduces the year-end reconciliation burden.
Two technical choices in the notification deserve attention:
FIFO for acquisition and holding period. When your client has purchased shares of the same company in multiple tranches, the system will assume the first purchased is the first sold. This affects whether a gain is short-term or long-term — a distinction worth lakhs for active equity investors.
Weighted Average Price for sale consideration. Where a client sold shares across multiple trades in a session or over multiple days, the system will compute a weighted average price as the sale consideration. Importantly, taxpayers can modify this figure before filing their ITR if actual trade data differs or if a different permissible method applies.
A Real Example — What This Looks Like for Your Client
Priya is a salaried professional in Mumbai who also invests regularly in equity mutual funds. During April–September 2026, she redeemed units across four different schemes:
Her depository participant will compile all of this into SFT-2517 and file it by 31 October 2026. By the time Priya opens her AIS (Form 168) in November, she will see these exact figures — broken down, FIFO-matched, WAP-computed — waiting in her pre-fill. Her CA’s job shifts from data reconstruction to data verification. That is the intent.
SFT-2517 doesn’t remove your responsibility — it raises your accountability.
When the AIS pre-fill carries data from a regulated depository participant, the Department will treat discrepancies between the pre-fill and the filed ITR as presumptively incorrect on the taxpayer’s side. Clients must therefore be educated to review — not blindly accept — the AIS data. WAP estimates may differ from actual execution prices. FIFO may not always produce the tax-optimal result even if it is the mandated default. The CA’s role is to verify the pre-fill, flag legitimate differences, and file the ITR with the correct supported figures.
The AIS Connection — Why This Matters for Reconciliation
Under the Income-tax Act, 2025, the Annual Information Statement is now Form 168. SFT-2517 data flows directly into Form 168 as a reported category. This means:
- Taxpayers can now reconcile their own trade records against the depository’s reported figures before filing — not after a notice.
- The ‘Information Source’ for capital gain transactions in Form 168 will now read as the depository participant’s name.
- Clients should be counselled to download Form 168 in November (for H1 transactions) and compare it against their own trade ledgers from NSDL/CDSL CAS statements.
1. Advise equity-investing clients to download a fresh Form 168 by mid-November 2026. The H1 SFT data (April–September) will be available after the 31 October depository deadline.
2. Build a reconciliation step into your capital gains review workflow. Compare Form 168 data against NSDL/CDSL Consolidated Account Statement (CAS) and broker trade confirmation notes for each client. Do not accept WAP figures without verification against actual contract notes.
3. Flag FIFO-driven short-term conversions proactively. Clients who made multiple purchases of the same scrip at different times — and subsequently sold — may find that FIFO has converted what they assumed was a long-term gain into a short-term one. Identify these before filing, not after.
Disclaimer: This article is for general informational and educational purposes only. It does not constitute legal, tax or professional advice. Readers should consult a qualified Chartered Accountant or tax professional for advice specific to their circumstances. While every effort has been made to ensure accuracy as of the date of publication, tax laws are subject to change.