ITR Filing 2026: Interest Earned From NBFC, HFC Must Now Be Reported Under Schedule OS

Taxpayers who have gained interest income from Non-Banking Financial Companies (NBFCs), Housing Finance Companies (HFCs) and corporate fixed deposits (FDs) during Financial Year 2025-26, will now have to report it more clearly while filing their Income Tax Return (ITR) for Assessment Year (AY) 2026-27.

The Income Tax Department has revised the return filing structure and made changes in how certain types of interest income are disclosed. The focus is on clearer categorisation under Schedule OS (Other Sources), which deals with income from other sources.

Categorisation Of NBFC And HFC Interest

Under the revised ITR forms for AY26-27, interest earned from companies, NBFCs, and HFCs must be reported under Schedule OS, referring to “Income from Other Sources”, which is used for reporting income that does not fall under salary, house property, capital gains, or business income.

In earlier versions of the return forms, NBFC and HFC interest income was not separately mentioned. Taxpayers had to decide how to classify it within the broader “other income” category. The revised forms now have done away with this ambiguity by explicitly naming these entities.

What Income Falls Under Schedule OS

Schedule OS includes various types of income that are not part of primary heads of income. These include:

• Interest from savings bank accounts

• Interest from fixed deposits with banks and post offices

• Dividend income

• Interest on income tax refunds

• Family pension income

• Taxable interest from provident fund in specific cases

• Gifts above Rs 50,000 under Section 56(2)(x) of the Income Tax Act, 1961

• And now, explicitly, interest from companies, NBFCs and HFCs

This means that interest earned from NBFC or HFC fixed deposits or debentures must be included in this section while filing returns.

Tax Rules Remain Same

There is no change in how interest income from NBFCs and HFCs is taxed. It will continue to be added to total income and taxed as per the individual’s applicable income tax slab rate.

For instance, if a taxpayer falls in the 30 per cent tax bracket, interest income from NBFC or HFC fixed deposits will also be taxed at 30 per cent. The same treatment applies to bank fixed deposit interest. The revisions only have impact on reporting requirements, not on tax liability.

ITR Deadline And Fine

The deadline for filing ITR for AY 2026-27 is July 31, 2026, for taxpayers who do not require audit. Missing the deadline may attract a penalty of Rs 5,000 under Section 234F of the Income-tax Act, 1961. Apart from this, interest would also be applied under Sections 234A, 234B and 234C.

For example, if a person earns interest from an NBFC FD, they must report it correctly under Schedule OS in the “Others” section while filing the return. Form 26AS and Annual Information Statement (AIS) should have identical figures to prevent discrepancies in the processing.

Tax Deducted at Source (TDS), wherever applicable, will already be reflected in Form 26AS and must be reconciled with declared income.

Applicable ITR Forms

The revised disclosure requirement applies across multiple Income Tax Return forms depending on the taxpayer’s profile.

• ITR-2 is usually used by salaried individuals and pensioners with investment income.

• ITR-3 applies to individuals and Hindu Undivided Families (HUF) with business or professional income.

• ITR-5 is used by partnership firms and Limited Liability Partnerships.

• ITR-7 applies to trusts and certain institutions.

The correct form depends on the combination of income sources: salary, investments, and business earnings.