CBDT Launches Form 173A for Govt Securities Tax Exemption

CBDT introduces Form 173A for taxpayers claiming income tax exemptions on government securities. Learn about the new reporting requirements.

The Central Board of Direct Taxes (CBDT) has introduced a new reporting mandate for taxpayers who wish to claim specific income-tax exemptions on interest and capital gains derived from government securities. This new requirement is facilitated through the introduction of Form 173A under the Income-tax Rules, 2026.

According to a notification released by the Ministry of Finance on October 19, the Income-tax (Seventh Amendment) Rules, 2026, now require taxpayers to submit the prescribed information via Form 173A if they are claiming exemptions under Table entries 13D and 13E of Schedule IV of the Income-tax Act, 2025. These amended rules became effective immediately upon their publication in the Official Gazette.

What Information is Required in Form 173A?

The newly implemented form is designed to create a standardized mechanism for collecting data regarding exemption claims. It requires a comprehensive set of details from the investor to ensure transparency and compliance. The required information includes:

Investor Personal and Identification Details

Full name and address of the investor.
Country of residence.
Permanent Account Number (PAN).
Contact details, including email address and phone number.
The specific tax year for which the claim is being made.
Tax identification number from the investor's country of residence (if applicable).
Securities and Exchange Board of India (SEBI) registration number, where relevant.

Detailed Security Information

Investors must provide granular data regarding the government securities for which they are seeking tax relief. This includes:

The International Securities Identification Number (ISIN).
The specific type and tenor of the securities.
The total value of the securities as of April 1.
Details of all purchases made during the relevant tax year.
Proceeds generated from the sale of securities.
The total value of the holdings as of March 31.

Financial Disclosures and Covered Securities

Beyond the identity of the assets, Form 173A demands clear financial disclosures. Investors are required to report the gross interest that was either received or accrued during the tax year, as well as any capital gains earned from these investments.

The scope of government securities covered under this new reporting requirement is broad, including:

Treasury bills.
Fixed-rate bonds.
Floating-rate bonds.
State Development Loans (SDLs).
Other specified securities as per the rules.

Important Compliance Notes

The Ministry of Finance has emphasized that this is not a blanket exemption for all investors or all types of income earned from government securities. The requirement specifically applies to claims made under the identified provisions of Schedule IV.

Furthermore, the taxpayer must formally certify that all information provided in the form is true to the best of their knowledge and belief and aligns with the provisions of the Income-tax Act, 2025. The amendment was officially published in the Gazette of India by the Department of Revenue, Ministry of Finance.