New Form 173A prescribed for exemption on government securities

Income-tax (Seventh Amendment) Rules, 2026: New Form 173A Prescribed for Exemption on Government Securities

The Ministry of Finance, through the Central Board of Direct Taxes (CBDT), has introduced the Income-tax (Seventh Amendment) Rules, 2026 to prescribe additional reporting requirements for taxpayers claiming exemptions on interest income and capital gains arising from Government securities.

The amendment modifies the Income-tax Rules, 2026, by introducing a new rule and a dedicated reporting form for furnishing the prescribed information.

1. Notification Details

Issuing Authority: Ministry of Finance, Department of Revenue, CBDT
Notification Number: 137/2026
File Number: 370142/35/2026-TPL
Date of Notification: To be confirmed from the published Gazette
Relevant Legislation: Income-tax Act, 2025
Effective Date: Date of publication in the Official Gazette

2. Insertion of New Rule 281A

A new Rule 281A has been inserted after Rule 281 of the Income-tax Rules, 2026.

Under this provision, taxpayers seeking exemption under Serial Numbers 13D and 13E of the table in Schedule IV of the Income-tax Act, 2025, must furnish the prescribed information in the newly introduced Form No. 173A.

3. Introduction of Form No. 173A

The amendment introduces Form No. 173A, titled Information to be Furnished for Claiming Exemption on Interest and Capital Gains from Government Securities.

The form requires information to be submitted in two parts.

Part A: Basic Information

The applicant must provide the following particulars:

Full name of the applicant.
Country of residence.
Complete address in the country of residence or headquarters.
Permanent Account Number (PAN).
Tax Identification Number (TIN) in the country of residence.
SEBI registration number as a Foreign Portfolio Investor (FPI) or Foreign Institutional Investor (FII).
Tax year for which the exemption is claimed.
Email address.
Contact number, including the country code.

The TIN and SEBI registration details are optional for the Bank for International Settlements (BIS).

Part B: Details of Exempt Income from Government Securities

The form requires security-wise information relating to the Government securities for which the exemption is being claimed.

The prescribed particulars include:

International Securities Identification Number (ISIN).
Category of Government security, such as Treasury Bills, fixed-rate bonds, floating-rate bonds, State Development Loans (SDLs), or other securities.
Tenor of the security.
Total value of securities held as of 1 April.
Value of securities purchased during the tax year.
Sale consideration received from securities sold during the year.
Total value of securities held as of 31 March.
Gross interest received or accrued during the tax year.
Capital gains earned during the tax year.

Part B can be repeated wherever details of multiple securities are required.

4. Declaration and Certification

The form must include a declaration confirming that the information furnished is accurate to the best of the declarant’s knowledge and belief and complies with the applicable provisions of Schedule IV of the Income-tax Act, 2025.

The declaration must be accompanied by the date, place, signature, and name of the principal officer.

5. Important Instructions for Filing

The amendment specifies the following requirements:

The applicant’s name must be stated in full.
The address must contain the country or specified territory, building details, road or street, PIN or ZIP code, locality, district, and state.
All monetary amounts must be reported in Indian rupees (₹), unless another unit is specifically prescribed.
The TIN and SEBI registration number are optional for BIS.

6. Effective Date and Applicability

The Income-tax (Seventh Amendment) Rules, 2026, will become effective from the date of their publication in the Official Gazette.

The new reporting requirements apply to claims for exemption covered by Serial Numbers 13D and 13E of Schedule IV of the Income-tax Act, 2025.

Conclusion

The amendment establishes a specific reporting mechanism for taxpayers claiming exemptions on interest income and capital gains from Government securities. By prescribing Form No. 173A, the CBDT has introduced a structured method for collecting taxpayer particulars, security-wise holdings, interest income, and capital gains information relevant to such exemption claims.

Taxpayers and eligible investors should review the prescribed form and ensure that the required details are maintained and furnished in accordance with the applicable provisions.

Notification

Also Read: SFT – 2517: Depository Transaction Reporting, Due Dates & Key Guidelines

Also Read: “CBDT Notifies New Forms PAN CR-01 & PAN CR-02 for PAN Correction from 1 April 2026”

Also Read: FAQs and Guidance notes on Forms under Income-tax Rules, 2026

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