How to Report Interest and Other Income in ITR-3 for AY 2026-27

If you are filing ITR-3 for AY 2026-27, reporting your income correctly is essential to avoid tax notices, mismatches, and incorrect tax calculations. Apart from business or professional income, taxpayers may also earn interest income, dividend income, family pension, rental income, or other sources of income.

These incomes generally need to be reported separately in the relevant schedules of the ITR-3. In this guide, we explain how to report interest and other income in ITR-3 for AY 2026-27, which income sources are covered, where they are reported, and what taxpayers should keep in mind while filing their income tax return.

What Is “Income from Other Sources” in ITR-3?

Under the Income Tax Act, income that does not fall under salary, house property, business or profession, or capital gains may generally be taxable under the head “Income from Other Sources.”

Common examples include:

• Interest from savings bank accounts
• Interest from fixed deposits (FDs)
• Interest from recurring deposits (RDs)
• Interest on bonds and securities
• Dividend income
• Family pension
• Certain gifts
• Other taxable income not covered under another head

For taxpayers filing ITR-3, these incomes should be disclosed accurately along with business, professional, capital gains, or other applicable income.

How to Report Interest Income in ITR-3?

Interest income is one of the most common types of income reported under Income from Other Sources.

1. Savings Bank Interest

Interest earned from savings bank accounts is taxable and should be reported in the appropriate section of the ITR-3.

For example, if you earned:

• ₹8,000 from Bank A
• ₹5,000 from Bank B

your total savings bank interest would be ₹13,000 and should be considered while preparing your return.

Eligible taxpayers may claim the applicable deduction for savings account interest under the Income Tax Act, subject to the relevant conditions.

2. Fixed Deposit Interest

Interest earned on fixed deposits is generally taxable at the applicable slab rate.

Banks may deduct TDS on interest income when applicable. However, the taxpayer should not report only the amount received after TDS. The return should generally reflect the gross taxable interest income, with eligible TDS claimed separately.

For example:

FD Interest: ₹50,000
TDS: ₹5,000

The taxable interest income should be considered as ₹50,000, while the eligible ₹5,000 TDS can be claimed as tax credit.

3. Recurring Deposit Interest

Interest earned from recurring deposits is also generally taxable. The taxpayer should include the applicable interest income while preparing the ITR-3.

It is important to reconcile the interest figures with the bank statements, Form 26AS, and AIS.

How to Report Dividend Income in ITR-3?

Dividend income from shares, mutual funds, or other investments may also be taxable depending on the applicable tax provisions.

Taxpayers should check their:

• Dividend statements
• Bank statements
• Form 26AS
• Annual Information Statement (AIS)
• Taxpayer Information Summary (TIS)

The dividend income should be reported under the appropriate income schedule in ITR-3.

If TDS has been deducted on dividend income, the corresponding tax credit should also be checked before filing the return.

How to Report Family Pension in ITR-3?

Family pension received by a taxpayer is generally taxable under Income from Other Sources, subject to the applicable provisions.

The taxable family pension should be reported under the relevant section of the ITR-3.

A deduction may be available from family pension subject to the limits and conditions prescribed under the Income Tax Act.

How to Report Interest from Bonds and Securities?

Interest received from bonds, debentures, securities, and similar investments may be taxable under Income from Other Sources, depending on the nature of the income and applicable tax provisions.

Taxpayers should maintain records of:

• Interest received
• Date of receipt
• TDS deducted
• Investment details
• Relevant statements or certificates

The income should be reconciled with the information appearing in AIS and Form 26AS.

How to Report Other Taxable Income in ITR-3?

Apart from interest and dividends, a taxpayer may have other taxable receipts.

Examples can include:

• Certain gifts taxable under the Income Tax Act
• Interest on compensation
• Income from certain investments
• Certain casual or miscellaneous taxable receipts
• Other income that does not fall under salary, house property, business/profession, or capital gains

The correct tax treatment depends on the nature of the receipt. Therefore, taxpayers should determine the applicable provision before reporting it in ITR-3.

Interest Income and TDS: What Should You Check?

One of the most common mistakes while filing an income tax return is reporting income without reconciling the corresponding TDS.

Before filing ITR-3 for AY 2026-27, compare your income details with:

Form 26AS + AIS + TIS + Bank Statements + Investment Statements

This reconciliation can help identify:

• Interest income missing from your records
• Duplicate income entries
• Incorrect TDS information
• Dividend income not recorded
• Bank interest reported by the bank but missed by the taxpayer

If there is a difference between your records and AIS or Form 26AS, investigate the difference before submitting the return.

Where Is Interest and Other Income Reported in ITR-3?

The exact schedule and field depend on the nature of the income. Generally, taxable income under Income from Other Sources is reported in the relevant section of ITR-3.

Taxpayers should carefully classify the income rather than reporting every receipt under one category.

For example:

Correct classification is important because different income heads can have different tax treatment and deductions.

Can Expenses Be Claimed Against Other Sources Income?

Certain expenses may be deductible against specific types of income under the Income Tax Act, subject to applicable conditions.

However, taxpayers should not automatically deduct personal or unrelated expenses from interest or other income.

For example, simply incurring a bank charge or investment-related expense does not necessarily mean that the entire amount can be deducted from taxable income.

The eligibility of any deduction should be checked based on the nature of the income and the applicable provisions for AY 2026-27.

Common Mistakes While Reporting Interest and Other Income in ITR-3

1. Not Reporting Bank Interest

Some taxpayers assume that small amounts of savings account or FD interest do not need to be reported. Taxability and reporting requirements should be considered separately from whether TDS was deducted.

2. Reporting Net Interest After TDS

If ₹50,000 interest is earned and ₹5,000 TDS is deducted, the income should not simply be reported as ₹45,000.

3. Ignoring AIS

AIS can contain information about interest, dividends, securities transactions, and other financial activities. It should be reviewed before filing.

4. Claiming Incorrect TDS

TDS should be claimed only after checking the corresponding income and tax credit reflected in the relevant tax records.

5. Missing Dividend Income

Dividend income may be received from multiple companies or investment platforms. Consolidating all dividend statements is important.

6. Incorrect Income Classification

Business income, rental income, capital gains, and income from other sources should not be mixed together merely because the amounts were received in the same bank account.

Documents Required to Report Interest and Other Income

Before filing ITR-3, keep the following documents and information ready:

• Bank statements
• Fixed deposit interest certificates
• Recurring deposit statements
• Dividend statements
• Bond or securities interest statements
• Form 26AS
• AIS and TIS
• TDS certificates, where applicable
• Investment statements
• Details of family pension, if applicable
• Details of other taxable receipts

How to Avoid Income Mismatch While Filing ITR-3?

A proper reconciliation process can significantly reduce the chances of an income mismatch.

Follow these steps:

Step 1: Download Form 26AS and AIS.

Step 2: Collect all bank and investment statements.

Step 3: Identify interest, dividend, and other taxable income.

Step 4: Compare the figures with AIS and Form 26AS.

Step 5: Check TDS credits.

Step 6: Classify each income under the correct income head.

Step 7: Enter the income in the appropriate ITR-3 schedule.

Step 8: Review the complete return before verification.

ITR-3 Filing for AY 2026-27

If you have business or professional income along with interest, dividend, capital gains, or other sources of income, ITR-3 may require reporting across multiple schedules.

If you are already preparing your ITR-3, you may also find our related guides useful:

• ITR-3 Filing for AY 2026-27: https://mycasathi.com/blog/itr-3-filing-ay-2026-27
• Who Should File ITR-3 for AY 2026-27: https://mycasathi.com/blog/who-should-file-itr-3-ay-2026-27
• Documents Required for ITR-3 Filing: https://mycasathi.com/blog/documents-required-for-itr-3-filing-ay-2026-27
• ITR-3 vs ITR-4 – Which Is Right for You?: https://mycasathi.com/blog/itr-3-or-itr-4-which-is-right-for-you-ay-2026-27
• How to File ITR-3 Online: https://mycasathi.com/blog/how-to-file-itr-3-online-ay-2026-27

Final Words

Reporting interest and other income correctly in ITR-3 for AY 2026-27 is important for accurate tax computation and proper disclosure of your total income. Savings account interest, FD interest, dividend income, family pension, and other taxable receipts should be reviewed carefully and reported under the appropriate income head.

Before submitting your ITR-3, always reconcile your income and TDS details with AIS, TIS, Form 26AS, bank statements, and investment statements. Accurate reporting can help reduce the risk of tax mismatches and unnecessary notices.

If you have business or professional income and are unsure how to report your interest, dividend, or other income in ITR-3, consider taking professional tax assistance before filing your return.