ITR Filing 2026: Declare NBFC, HFC FD Interest Under Schedule OS

The Income Tax Department has rolled out new Income Tax Return (ITR) forms for the assessment year 2026–27, introducing crucial updates for taxpayers. One key highlight is the mandatory disclosure of interest income from fixed deposits (FDs) held with Non-Banking Financial Companies (NBFCs), Housing Finance Companies (HFCs), and other corporate entities under Schedule OS (Other Sources). This change is designed to enhance transparency and tighten compliance, especially for retail investors.

If you’ve invested in NBFC or HFC fixed deposits, here’s everything you need to know about the updated rules, their implications, and how to stay compliant with the latest regulations.

Mandatory Reporting of Non-Bank FD Interest

Previously, taxpayers often overlooked disclosing interest earned from FDs with NBFCs, HFCs, or corporate entities. The updated ITR forms now make it compulsory to declare such income under Schedule OS, bringing all fixed deposit interest under the tax department’s review.

Accrued vs. Received Interest Income

The new forms also require taxpayers to differentiate between accrued interest (earned but not withdrawn) and received interest (credited to your account). This ensures a more accurate representation of taxable income and prevents underreporting.

Enhanced Transparency and Record-Keeping

This update requires retail investors to maintain meticulous records of their fixed deposit earnings across different institutions. Taxpayers will need Form 16A or equivalent interest statements from NBFCs, HFCs, and corporate entities to ensure accurate declarations.

Potential Tax Implications

Declaring all interest income could increase your taxable income, possibly pushing you into a higher tax slab. To counterbalance this, you may consider investing in tax-saving instruments such as ELSS funds, PPF accounts, or Section 80C plans to minimize tax liabilities.