Form 173A: CBDT sets government securities disclosure rules

The Central Board of Direct Taxes (CBDT) has introduced Form 173A, making it mandatory to furnish information when claiming specified exemptions on interest and capital gains from government securities. The Income-tax (Seventh Amendment) Rules, 2026 insert Rule 281A into the Income-tax Rules, 2026 and take effect from publication in the Official Gazette, according to the CBDT notification.

The amendment is set out in Notification No. 137/2026, which JurisHour reported was dated 19 October 2026. Rule 281A applies to exemption claims under Schedule IV, Table, Serial Nos. 13D and 13E of the Income-tax Act, 2025. These are the particular statutory entries to which the new information requirement is tied.

The notification prescribes disclosures for claiming those exemptions; it does not create a general tax exemption for everyone holding government securities. Its practical effect is to require covered claimants to provide identification particulars, security-wise investment details and separate figures for interest and capital gains.

What Form 173A requires

The CBDT has divided the form into basic information in Part A and details of exempt income claimed on government securities in Part B. The form identifies both the person claiming the exemption and the securities underlying that claim, rather than asking only for a combined income figure.

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

The form separately seeks the Securities and Exchange Board of India (SEBI) registration number as a Foreign Portfolio Investor (FPI) or Foreign Institutional Investor (FII). These are investor categories relevant to foreign investment in Indian securities. The tax year for which the exemption is claimed must also be stated, along with an email address and contact number with the country code.

The CBDT’s instructions specify the components of the address, including the country or specified territory, building and street particulars, PIN or ZIP code, locality, district and state.

A limited exception applies to the Bank for International Settlements (BIS). Under the notes to Form 173A, its foreign TIN and SEBI registration number are optional. The relaxation concerns those two fields, not the form’s remaining disclosures.

Holdings, transactions and income must be shown separately

Part B of the CBDT’s form begins with the International Securities Identification Number (ISIN), the identifier for the security concerned. It also asks for the type of government security and its tenor, or duration.

The listed categories are Treasury Bills, fixed-rate bonds, floating-rate bonds and State Development Loans (SDLs). An “Others” option allows the claimant to specify another type. The form permits the details to be repeated where required, accommodating claims involving additional securities.

For each relevant security, the prescribed entries cover the total value held on 1 April, the value purchased during the year, the sale consideration received for securities sold during the year, and the total value held on 31 March. These fields distinguish opening and closing holdings from purchases and sales during the tax year.

The income entries are separate from those investment figures. The CBDT requires disclosure of the gross amount of interest received or accrued during the tax year, as well as capital gains earned during that year. Accrued interest means interest earned even if it has not yet been received; the form expressly covers both received and accrued amounts.

Sale consideration is therefore not presented as a substitute for capital gains: the form contains a distinct entry for each. Its instructions require amounts to be entered in Indian rupees unless otherwise provided.

The declaration requires certification that the information is true to the declarant’s knowledge and belief and accords with the specified Schedule IV provisions. The prescribed format includes the date, place, signature and name of the principal officer.

The exemption framework and filing details

Background published by the Press Information Bureau helps distinguish the underlying tax framework from the new reporting rule. Its document, “Frequently Asked Questions (FAQs) on FIIs Exemption”, explains that Section 210 of the Income-tax Act, 2025 provides a specific framework for taxing FIIs’ income from securities and capital gains from their transfer.

The FAQ discusses a proposed exemption for FIIs’ interest income from government securities and capital gains arising on their transfer or redemption. That proposal-stage explanation is distinct from the CBDT notification, which prescribes information for claims under the specified Schedule IV entries.

For the proposed exemption, the FAQ describes government securities by reference to the Securities Contracts (Regulation) Act, 1956: securities issued by the Central Government or a state government to raise a public loan, in the legally specified forms. It also states that government securities may be listed on a recognised Indian stock exchange or remain unlisted.

The CBDT notification itself deals with the information requirement and prescribed form. Although it makes the amendment effective on Gazette publication, it does not expressly set a separate filing deadline for Form 173A or specify an electronic filing mechanism. The commencement provision establishes when the rule takes effect, not a calendar deadline for submitting the form.