The Central Board of Direct Taxes (CBDT) has prescribed a new reporting form for claiming income-tax exemptions on interest and capital gains from government securities under specified provisions of the Income-tax Act, 2025.
Under the Income-tax (Seventh Amendment) Rules, 2026, notified on October 19, eligible claimants must furnish information in Form 173A to claim exemptions under Schedule IV, Table entries 13D and 13E, of the Act.
What is Form 173A?
Form 173A is a prescribed form for providing information on government securities and the interest and capital gains for which an exemption is being claimed. The amendment inserts Rule 281A into the Income-tax Rules, 2026, specifying the information requirement for these claims.
What information must be provided?
The form has two parts. Part A requires basic details, including the claimant’s name, country of residence, address, Permanent Account Number (PAN), tax identification number in the country of residence, SEBI registration number as a foreign portfolio investor (FPI) or foreign institutional investor (FII), the tax year for which the exemption is claimed, email address and contact number.
Part B requires details of the government securities for which the exemption is claimed. These include the International Securities Identification Number (ISIN), type and tenor of the securities, their value at the beginning and end of the tax year, purchases during the year, sale proceeds from securities sold, gross interest received or accrued, and capital gains earned during the tax year.
The form allows the securities-related details to be repeated where required. Amounts must be reported in rupees unless otherwise specified.
Which government securities are covered in the form?
The form lists treasury bills, fixed-rate bonds, floating-rate bonds and State Development Loans (SDLs). It also provides an option to specify other types of government securities.
What is the requirement for the Bank for International Settlements?
The form states that providing the tax identification number in the country of residence and the SEBI registration number as an FPI/FII is optional for the Bank for International Settlements (BIS).
The claimant must also provide a declaration certifying that the information is true to the best of their knowledge and belief and is in accordance with the relevant provisions of Schedule IV of the Income-tax Act, 2025.
When does the amendment take effect?
The Income-tax (Seventh Amendment) Rules, 2026, come into force on the date of their publication in the Official Gazette.