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The Central Board of Direct Taxes (CBDT) has prescribed a new form for furnishing information to claim income-tax exemption on interest income and capital gains from government securities, according to a government notification.
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The CBDT notified the Income-tax (Seventh Amendment) Rules, 2026, on October 19. The rules introduce Form 173A, which must be furnished to claim tax exemption under entries 13D and 13E of Schedule IV of the Income-tax Act, 2025. The exemptions cover interest income from government securities and capital gains arising from their sale, exchange or transfer. Entry 13D applies to foreign institutional investors (FIIs), while entry 13E covers the Bank for International Settlements (BIS). The exemptions are not available to ordinary investors.
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The form requires taxpayers to furnish basic details, including their name, country of residence, address, Permanent Account Number (PAN), tax identification number in the country of residence, Securities and Exchange Board of India (Sebi) registration number as a foreign portfolio investor (FPI) or foreign institutional investor (FII), tax year, email address and contact number.
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It also seeks transaction-level details of government securities, including their International Securities Identification Number (ISIN), type of security, tenor and value as of April 1. The categories of securities listed in the form include Treasury Bills, fixed-rate bonds, floating-rate bonds and State Development Loans (SDLs), along with other securities.
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Taxpayers will also be required to report the value of securities purchased during the year, sale consideration of securities sold, total value of holdings as of March 31, gross interest received or accrued during the tax year and capital gains earned during the year.
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The form includes a declaration certifying that the information furnished is true and consistent with the provisions of Schedule IV of the Income-tax Act, 2025. It is to be signed by the principal officer.
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The notification specifies that the tax identification number and Sebi registration number details are optional for the Bank for International Settlements (BIS).
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The Income-tax Rules, 2026, were originally notified on March 20, 2026, and have since been amended through subsequent notifications.
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