Your Interest and Dividend Income will be reported to Income Tax Department.

The Central Board of Direct Taxes (CBDT) has issued detailed guidelines on how banks and companies will report information related to the interest and dividend income of taxpayers.

Commerce Insiders

👉Section 285BA of the Income Tax Act, 1961, and Rule 114E requires a “specified reporting person” to furnish a statement of financial transaction. 

👉Banks will have to report the details of all those taxpayers whose interest income across deposits exceeds ₹5,000 in a fiscal year.

👉For companies, there is no minimum limit. They will have to report details of the dividend paid to every shareholder. 

👉In March, the tax department issued a circular directing a few entities including banks, companies, and brokers to report the interest, dividend, and capital gains earned by investors to the tax department every year.

👉The purpose of this is to enable the tax department to provide pre-filled information in the tax forms to the taxpayers. 

👉In the Union Budget 2021-22, the finance minister announced that taxpayers will get information related to capital gains and dividends pre-filled in their tax forms.