CBDT Makes Form 173A Mandatory for Claiming Tax Exemption on Govt Securities

New Delhi, Oct 21 (KNN) The Central Board of Direct Taxes (CBDT) has introduced a new Form 173A for foreign institutional investors (FIIs) and the Bank for International Settlements (BIS) to claim income-tax exemption on interest and capital gains from government securities.

The Income-tax (Seventh Amendment) Rules, 2026, notified on October 19, make furnishing the form mandatory for claiming exemptions under entries 13D and 13E of Schedule IV of the Income-tax Act, 2025.

Entry 13D covers FIIs, while entry 13E applies to the BIS. The exemptions cover interest earned on government securities and capital gains arising from their sale, exchange or transfer. They are not available to ordinary investors.

Details Required In Form 173A

The form requires basic details, including the applicant’s name, country of residence, address, PAN, tax year, email address and contact number. It also seeks the tax identification number (TIN) in the country of residence and Securities and Exchange Board of India (Sebi) registration number as an FPI or FII. These two details are optional for the BIS.

Applicants must also provide details of the government securities, including their International Securities Identification Number (ISIN), type and tenor. The listed categories include Treasury Bills, fixed-rate bonds, floating-rate bonds, State Development Loans (SDLs) and other securities.

The form further requires the value of securities held at the beginning and end of the tax year, purchases made during the year, sale consideration of securities sold, gross interest received or accrued, and capital gains earned.

The information must be furnished in rupees unless otherwise specified. Part B of the form can be repeated where necessary, and the declaration must be signed by the principal officer.

The amendment inserts Rule 281A into the Income-tax Rules, 2026, after Rule 281 and places Form 173A after Form 173. The rules came into force on their publication in the Official Gazette.

The Income-tax Act, 2025, and the Income-tax Rules, 2026, came into effect on April 1, 2026, and were published in the Gazette on March 20, respectively. Entries 13D and 13E were introduced through the Income-tax (Amendment) Ordinance, 2026, promulgated on June 5 with effect from April 1.

(KNN Bureau)