The Central Board of Direct Taxes (CBDT) has notified a new reporting requirement for assessees claiming specified income-tax exemptions on interest and capital gains from government securities. Eligible claimants will now be required to furnish information in Form No. 173A under the newly inserted Rule 281A of the Income-tax Rules, 2026.

The amendment has been introduced through Notification No. 137/2026, dated October 19, 2026, notifying the Income-tax (Seventh Amendment) Rules, 2026. The rules come into force from the date of their publication in the Official Gazette. 

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Rule 281A requires an assessee claiming exemption under Schedule IV, Table, Serial Nos. 13D and 13E of the Income-tax Act, 2025, to furnish information in the prescribed form.

Form 173A is specifically titled “Information to be furnished for claiming exemption on interest and capital gains from Government securities.” It seeks both the claimant’s identification particulars and details of the securities and income for which exemption is claimed.

The notification prescribes a reporting requirement linked to these particular statutory exemptions. It does not announce a general tax exemption for every investor earning interest or capital gains from government securities.

The amendment has been issued in exercise of the powers conferred by Section 533, read with Section 11 and Schedule IV of the Income-tax Act, 2025.

Part A of Form 173A requires the claimant’s full name, country of residence, address in the country of residence or headquarters, Permanent Account Number (PAN), and Tax Identification Number (TIN) in the country of residence.

The form also seeks the Securities and Exchange Board of India (SEBI) registration number as a Foreign Portfolio Investor or Foreign Institutional Investor, the tax year for which exemption is claimed, an email address, and a contact number with the country code.

The address particulars must include the country or specified territory, flat or building details, road or street, block or sector, PIN or ZIP code, town or locality, district, and state.

Part B requires details of the government securities on which exempt income is claimed. The claimant must disclose the International Securities Identification Number (ISIN), the type of government security, and its tenor.

The form provides categories for Treasury Bills, fixed-rate bonds, floating-rate bonds, and State Development Loans. It also includes an “Others” category in which the relevant security type must be specified.

For each relevant security, the form seeks the total value held as on April 1, the value purchased during the year, the sale consideration of securities sold during the year, and the total value held as on March 31.

These disclosures will provide information about opening holdings, purchases, sales, and closing holdings during the relevant tax year. The form permits the details to be repeated where required for additional securities.

Along with investment and transaction particulars, claimants must report the gross amount of interest received or accrued during the tax year and the capital gains earned during that year.

The prescribed format therefore requires separate disclosure of interest income and capital gains. Amounts must be filled in Indian rupees unless otherwise provided.

The notes to Form 173A provide a specific relaxation for the Bank for International Settlements (BIS).

For BIS, disclosure of the TIN in the country of residence and the SEBI registration number as an FPI or FII is optional. The notification does not extend this relaxation to the remaining particulars required by the form.

Form 173A contains a declaration certifying that the information furnished is true to the best of the declarant’s knowledge and belief and is in accordance with Schedule IV, Table, Serial Nos. 13D and 13E of the Income-tax Act, 2025.

The declaration requires the date, place, signature, and name of the principal officer.

The Income-tax (Seventh Amendment) Rules, 2026 take effect from their publication in the Official Gazette. Assessees claiming the specified exemptions will need to compile the identification, investment, transaction, and income particulars required by Form 173A.

While the notification introduces the form and makes furnishing the information mandatory for the covered exemption claims, it does not expressly prescribe a separate filing deadline or specify the electronic filing mechanism.

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