ITR Filing 2026: NBFC, HFC fixed deposit interest must now be declared under schedule OS — Here's what changed

Lakhs of Indian investors who earned interest from NBFC or HFC fixed deposits and debentures in FY 2025-26 must now declare that income in a specific, newly defined field in their income tax return. Here is everything you need to know before the 31 July 2026 deadline.

New ITR Forms for AY 2026-27 Now Explicitly Name NBFCs and HFCs Under Schedule OS

The Income Tax Department has revised its return forms for Assessment Year 2026-27, and one change stands out for retail investors. The updated versions of ITR-2, ITR-3, ITR-5 and ITR-7 now explicitly require taxpayers to report interest income earned from Non-Banking Financial Companies, Housing Finance Companies and other corporates under the "Others" column of Schedule OS.

This is a meaningful departure from the ITR forms used for AY 2025-26, where the "Others" column did not specifically mention interest from NBFCs, HFCs or companies. Taxpayers had to use their own judgement about where such income belonged. That ambiguity is now gone.

According to an Upstox report citing tax experts at Taxmann, the new ITR forms clarify that interest earned from companies, Non-Banking Financial Companies (NBFCs), and Housing Finance Companies (HFCs) shall be reported under the 'Other' column of Schedule OS.

Interest income from instruments such as fixed deposits, debentures, etc., with such entities is required to be disclosed in Schedule OS where the assessee is not engaged in the business of money lending, the Upstox report added.

What Is Schedule OS in ITR and Why Does It Matter for NBFC and HFC Investors

Schedule OS is the portion of the income tax return where taxpayers declare income from sources outside salary, house property, capital gains and business or profession. For anyone who invested in NBFC fixed deposits, HFC fixed deposits or corporate debentures in FY 2025-26, this is now the mandatory reporting section.

For AY 2026-27, the full list of income that must be declared under Schedule OS includes the following: dividend income; interest from savings bank accounts; interest from bank and post office deposits; interest from income tax refunds; taxable provident fund interest; and, now explicitly, interest from companies, NBFCs and HFCs.

The schedule also covers gifts exceeding ₹50,000 received without consideration under Section 56(2)(x) of the Income-tax Act, 1961; family pension; income from a retirement benefit account maintained in a notified country; amounts received by unit holders from business trusts; and bonuses from life insurance companies.

How Is Interest Income From NBFC and HFC Fixed Deposits Taxed in India

Interest income from NBFC fixed deposits, HFC fixed deposits and corporate debentures is taxed at the investor's applicable individual income tax slab rate. There is no flat rate, no special exemption and no threshold specific to this category of income.

A taxpayer in the 30 per cent slab will pay 30 per cent income tax on this interest, just as they would on bank fixed deposit interest or salary income. The key difference in AY 2026-27 is not the tax rate but the reporting requirement: the income must now be placed precisely under the "Others" column of Schedule OS, not left to interpretation.

Which ITR Form Should NBFC and HFC Investors File for AY 2026-27

The revised disclosure requirement applies across four ITR forms. Salaried individuals and retirees with NBFC or HFC investment income, who do not run a business or profession, will typically file ITR-2. Self-employed individuals and those running a proprietorship alongside their investments will generally use ITR-3. Partnership firms, trusts and other non-individual entities fall under ITR-5 and ITR-7 respectively.

If you are unsure which form applies to your income profile, your total income composition — salary, investments, business — determines the correct form.

ITR Filing Deadline for AY 2026-27: 31 July 2026

The due date to file income tax returns for AY 2026-27 is 31 July 2026 for non-audit taxpayers, a category that includes the vast majority of individual investors. Filing after this date attracts a late fee of up to ₹5,000 under Section 234F, in addition to interest on any outstanding tax dues under Sections 234A, 234B and 234C.