Declare dividend income when filing your tax return
If you received any dividends on shares during the calendar year, it’s important to report them when you file your income tax return. Dividends must be shown under the appropriate schedule of the return — in many systems that is Schedule OS (Other Sources) where dividends are offered to tax.
What counts as dividend income?
- Cash dividends paid by companies on equity or preference shares.
- Dividend payments from mutual funds or unit trusts (depending on local tax rules).
- Any interim or final dividend credited to your account during the year.
Keep in mind that dividend rules and their taxability can vary by jurisdiction and over time, so check the current rules that apply to your tax year.
Why accurate disclosure matters
- Correct tax computation: Dividends declared in Schedule OS are included in total taxable income, affecting your overall tax liability.
- TDS and tax credits: If tax was deducted at source (TDS) on your dividends, disclosing the income lets you claim the credit and avoid double taxation.
- Compliance risk: Failure to report dividend income can invite reassessment, penalties or interest under tax rules.
How to report dividends in your return
Follow these practical steps to make sure your dividend income is properly declared and reconciled:
- Collect documents: Dividend statements from companies and mutual funds, bank credit advices, broker statements and any TDS certificates you received.
- Total each source: For each company or fund, calculate the total dividend received in the calendar year and note the date(s) of payment.
- Note tax deducted: Record any tax deducted at source separately — this will be needed to claim a credit in your return.
- Enter details in Schedule OS: List the dividend amount under the section for income from other sources (Schedule OS) and indicate the TDS amounts where applicable.
- Reconcile with tax statements: Cross-check the entries against your Form 26AS or the equivalent tax credit statement to ensure all TDS and dividend receipts match.
- Keep supporting records: Retain dividend vouchers or e-statements and TDS certificates in case tax authorities request proof later.
Common reporting points to double-check
- Whether a dividend was paid in cash or credited but not withdrawn.
- Any adjustments for stock-splits, bonus shares or corporate actions that affect the dividend amount.
- Timing — report dividends in the year they were received or credited, according to tax rules.
When to get professional help
If you have multiple sources of dividend income, foreign dividends, or complex situations such as Corporate Actions or exemptions claimed by the payer, it’s wise to consult a tax professional. They can ensure dividends are reported in the correct schedule, help claim foreign tax credits where applicable, and prevent inadvertent under-reporting.
Final tips
- Report every dividend received during the calendar year and show it in Schedule OS (or the equivalent schedule in your tax form).
- Keep records and reconcile with official tax credit statements before filing.
- When in doubt, seek advice — accurate reporting saves time, money and stress later on.