CBDT Introduces Form 173A for Tax Exemption Claims on Government Securities

The Central Board of Direct Taxes (CBDT) has notified Form 173A for claiming tax exemptions on interest income and capital gains from government securities, as per news reports.  

The Ministry of Finance issued the Income-tax (Seventh Amendment) Rules, 2026, on October 19, 2026, introducing the new reporting requirement. The form applies to exemptions under entries 13D and 13E of Schedule IV of the Income-tax Act, 2025.  

Entry 13D covers foreign institutional investors (FIIs), while entry 13E applies to the Bank for International Settlements (BIS). These exemptions are not available to ordinary investors. 

What Information Must Be Submitted? 

Form 173A requires applicants to provide their name, country of residence, address, Permanent Account Number (PAN), tax identification number in their country of residence and Securities and Exchange Board of India (SEBI) registration number as a foreign portfolio investor (FPI) or FII.  

The relevant tax year, email address, and contact number must also be provided. The notification makes the tax identification number and SEBI registration number optional for BIS. Other identification and contact details are covered by the form's requirements. 

Details of Government Securities and Income 

Applicants must report details of the securities for which they are claiming exemption, including the International Securities Identification Number (ISIN), type of security, tenure and value of holdings as of April 1. 

The form also asks for the value of securities purchased during the tax year, proceeds from securities sold, and the total value of holdings as of March 31. Applicants must disclose gross interest received or accrued during the year, and capital gains earned from the securities. 

The listed instruments include Treasury Bills, fixed-rate bonds, floating-rate bonds, and State Development Loans (SDLs), among other government securities. 

Declaration and Effective Date 

The information submitted must be certified as accurate and consistent with Schedule IV of the Income-tax Act, 2025. The declaration is to be signed by the principal officer. 

The Income-tax Rules, 2026, were first notified on March 20, 2026. The seventh amendment took effect on October 19, 2026, the date of its publication in the Official Gazette.  

Form 173A sets out the disclosures required from eligible entities seeking the exemptions. 

Read More: Apple India Revenue Crosses ₹1 Lakh Crore in FY26; Profit Jumps 66%! 

Conclusion  

The amended rules took effect on October 19, 2026. Eligible entities must provide details of their government securities, interest income and capital gains in Form 173A. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.