Got dividend income or bonus shares? Here’s how to report them in ITR for AY 2026–27

Suppose you held some stocks of a company in FY 2025-26. And the company sent you dividends, issued bonus shares, or split its stock. You liked the money or the stocks flowing to your account and felt like a smart investor.

But now that the ITR filing season is here, you are worried about the tax implications for what you enjoyed in the previous financial year. Don't worry, this article will help.

Let's answer this first: Are income from dividends, bonuses, and stock splits taxed?

The answer is yes, they are subject to tax. There are no free lunches when it comes to taxation. All your incomes are subject to taxation, based on the Income-tax Act, 1961, which is relevant for the current ITR filing season.

However, all three options are treated differently for taxation. A dividend income is not treated in the same way as a bonus share, even though both feel like the company gave you something for free.

Dividend taxation

The Income-tax Department treats dividend income in the same way as it treats your salary and interest. As such, the dividend income is added to your total income and taxed as per the slab rate applicable to you.

Bonus share taxation

When you receive a bonus share from a company, you do not receive any cash in your account, or no cash changes hands. As only shares are added to your demat account, their taxability does not arise. Income from shares is taxed when you book a gain after selling them.

Stock split taxation

Just like a stock bonus, there is no change in your wealth when a company does a stock split. During such an event, only the number of stocks in your portfolio rises. The taxability arises only when you sell some stocks and book gains.

When does taxability arise?

While dividends are taxed at slab rates, stock splits and bonus become taxable only when you sell shares received through this process. The latter income is taxed as long-term or short-term capital gains, depending on your total holding period.

Any capital gains from selling stocks received through splits and bonuses are to be reported under Schedule CG of ITR-2. ITR-1 can be useful here only if your capital gain is of a long-term nature and not above ₹1.25 lakh.

How are these reported in ITR?

For individual taxpayers, income from stock dividends can be reported as "Income from other sources" in ITR-1 or ITR-2. If any TDS is deducted on dividends, it is reflected in Form 26AS and AIS.

The due date to file ITR for AY 2026-27 is July 31, 2026.