The Central Board of Direct Taxes (CBDT) has introduced mandatory reporting requirements for Registrar and Share Transfer Agents (RTAs) under Notification No. 2 of 2026. This move mandates the submission of semi-annual transaction reports to automate the pre-filling of capital gains in tax returns. While the change aims to simplify tax filing for individual investors, it introduces new operational and compliance obligations for major market infrastructure companies.
The Central Board of Direct Taxes (CBDT) has issued a new directive, Notification No. 2 of 2026, that brings significant changes to how mutual fund transaction data is handled for tax purposes. Under these new rules, all Registrar and Share Transfer Agents (RTAs)—the entities that manage investor records for mutual funds—must now report transaction data directly to the tax department on a half-yearly basis.
This framework requires RTAs to file structured reports, known as SFT-2518, through a secure server. The objective is to standardize how capital gains, income, and losses are calculated and reported. By centralizing this information, the tax department aims to automatically pre-fill these details into the Annual Information Statement (AIS) of individual taxpayers. This is expected to reduce the manual work for investors who often struggle to reconcile their mutual fund records with their tax filings.
Impact on Market Infrastructure
For investors, the direct benefit is improved data accuracy and easier tax filing. However, the move places a significant operational requirement on major RTAs such as CAMS and KFinTech. These companies must now maintain robust systems to verify, format, and transmit large volumes of transaction data.
Each filing must include a 'Control Statement' verified by a designated director of the RTA. This ensures institutional accountability, meaning that errors in the submitted data could have regulatory consequences. Consequently, these companies may need to invest more in their technology and compliance departments to ensure their internal systems perfectly match the tax department’s validation requirements.
Reporting Deadlines and Calculation Standards
The regulation is strict regarding timelines. RTAs are required to submit reports for the period ending September 30 by October 31. Similarly, reports covering the period ending March 31 must be filed by April 30.
To ensure uniformity, the CBDT has mandated the First-in-First-out (FIFO) methodology for calculating capital gains. This method assumes that the oldest shares in a portfolio are sold first when an investor redeems their units. While the tax department will provide estimated figures for pre-filling returns, the regulation clarifies that taxpayers still retain the right to modify these figures if they have different records or specific financial circumstances.
Risks and Monitorables for Investors
While the automation is a positive step for retail investors, the potential risk lies in the execution. If an RTA’s system fails to map transactions correctly or if there are delays in file submissions, investors could see inaccurate data in their tax statements.
Investors should treat the pre-filled tax information as a reference guide rather than a final, error-free statement. It remains essential to cross-check these figures against one's own statements before filing. The key monitorable for the industry is how quickly RTAs upgrade their software to ensure zero-error data transfers and whether the increased compliance costs impact their profit margins in the coming quarters.