Companies pay dividends to their shareholders as rewards from their profits. Shareholders receive dividends based on the number of shares they own. This income is taxed as income from Other Sources.


Common questions about dividend income

  1. Can I claim expenses related to dividend income?
    Yes. If you’ve taken a loan to buy stocks and received dividends, you can claim the interest paid on the loan as an expense, up to 20% of your dividend income.
  2. Do I need to report dividend income including TDS?
    Yes. If your dividend income exceeds ₹5000, the company will deduct 10% TDS. However, you need to report the gross dividend income (before TDS) in your tax return. You can claim a tax credit for the TDS deducted.


Steps to add interest income

There are two ways to add your dividend income


1. Autofill from Income Tax Department

  • Navigate to File > Incomes > Other Incomes. Click Connect to import data from ITDNavigate to File > Incomes > Other Incomes. Click Connect to import data from ITD

  • Connect to ITD via Aadhaar OTP or credentialsConnect to ITD via Aadhaar OTP or credentials


    Your dividend income will be auto-filled. You can review it and proceed further.

2. Add Manually

  • Navigate to File > Incomes > Other Incomes, select Dividend IncomeNavigate to File > Incomes > Other Incomes, select Dividend Income
  • Enter the dividend income amount and, if applicable, claim any interest paid on loans used to buy stocksEnter the dividend income amount and, if applicable, claim any interest paid on loans used to buy stocks


If you still have any further queries, you can raise a ticket to get in touch with us.