ITR Filing FY2024-25: How To Report Investment Income From Stocks And Mutual Funds | Tax News

Last Updated:July 09, 2025, 11:01 IST

ITR Filing 2024-25: The experts warn that misreporting or under-reporting may result in interest, penalties, or assessment notices under various provisions of the Income Tax Act.

ITR Filing 2025: Check why proper reporting of dividend income in ITR is essential.

ITR Filing 2024-25: Amid the ongoing tax filing season for FY2024-25, there has been confusion among investors about the reporting of dividend income. As dividend income is no longer tax-exempt, accurate and timely reporting becomes critical to avoid legal hassles and ensure smooth tax compliance.

The experts warn that misreporting or under-reporting may result in interest, penalties, or assessment notices under various provisions of the Income Tax Act.

Anita Basrur, Partner, Sudit K. Parekh & Co. LLP explained that dividends received by shareholders whether from domestic companies, mutual funds, or foreign entities are now fully taxable in the hands of the recipient.

Dividend, as defined under Section 2(22) of the Income Tax Act, 1961, includes not just direct distributions of profit by companies but also certain deemed dividends such as loans to substantial shareholders.

At the time of paying the dividend, the companies and mutual funds are required to deduct the tax at source (‘TDS’) at 10% on dividend amount exceeding Rs. 10,000 in a financial year per resident shareholder however, if the shareholder does not have a PAN, tax is deductible at 20% as per Section 194 of the Income Tax Act, 1961 (‘the Act’).

Where To Report Dividend Income?

“Dividend income is usually taxed under the head ‘Income from Other Sources’, unless shares are held as part of a business,” said CA Akshay Jain, Direct Tax Partner at NPV & Associates LLP. He added that only interest expense incurred to earn the dividend can be claimed as a deduction, and that too is restricted to 20% of the total dividend income. “No other expenses are permitted,” he noted.

Adding further clarity, Anita Basrur, Partner at Sudit K. Parekh & Co. LLP, explained the disclosure requirements. “Taxpayers must report dividend income in Schedule OS of the ITR. Foreign dividends, in particular, need separate disclosure, and foreign tax credit (FTC) may be claimed under applicable DTAA provisions.”

Taxpayers are required to report dividend income in Schedule OS (Other Sources) of the ITR. Additionally:

• Breakup of dividend income received quarterly is to be provided to compute interest under section 234C of the Act (all types of entities)

• Foreign dividends must be separately disclosed, and foreign tax credits (‘FTC’) may be claimed where applicable under the Double Taxation Avoidance Agreement (‘DTAA’).

Also, taxpayers are required to report the TDS which is deducted under section 194 as mentioned above, in the TDS Schedule to claim the credit of taxes deducted against the dividend income.

Verify Dividend Figures With Form 26AS And AIS

Basrur said while filing the return of income, special check has to be kept on the amount of dividend income which is reported in Form 26AS or the Annual Information Statement (‘AIS’) to avoid any mismatch of information as disclosed in the income tax return form as well as the details available on the Income Tax.

“Any mismatch can trigger scrutiny or notices from the Income Tax Department. It’s important to cross-verify the actual dividend received with the information available on the portal,” Basrur cautioned.

Income Tax Deadline Extended

The Income Tax Department has extended the deadline for ITR filing of FY2024-25 to September 15 from July 31st, allowing taxpayers more time to complete their tax duties. Every taxpayer must complete their filing before the deadline to avoid penalties and a notice from the tax department.

The tax department has opened the utilities for ITR-1 and ITR-4 forms, so taxpayers who are eligible for these forms can file their ITRs in due time. It is advisable to not wait for the last time, because the portal may face glitches and issues due to overcrowding.

However, those taxpayers who are eligible for ITR-2 and ITR-3 have to wait longer, as utilities for these forms haven’t started yet.

Varun Yadav

Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst…Read More

Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst… Read More

view comments

First Published: