CBDT Form 173A: Eligibility, Tax Exemption Rules and Details Required (2026)

The Central Board of Direct Taxes (CBDT) has introduced Form 173A, a mandatory information-furnishing requirement for claiming specified tax exemptions on interest and capital gains from government securities. The requirement was notified on October 19, 2026, through the Income-tax (Seventh Amendment) Rules, 2026.

Under the newly inserted Rule 281A of the Income-tax Rules, 2026, eligible claimants must furnish information in Form 173A to claim exemptions under Schedule IV, Table entries 13D and 13E of the Income-tax Act, 2025. Entry 13D concerns eligible foreign institutional investors (FIIs), including qualifying foreign portfolio investors (FPIs), while entry 13E concerns the Bank for International Settlements (BIS).

Form 173A does not create a tax exemption for every investor holding government securities. It prescribes the information required to claim exemptions available under specific statutory provisions. Ordinary retail investors cannot claim this particular exemption merely because they own government bonds or Treasury Bills.

What Tax Exemption Does Form 173A Cover?

The underlying tax provisions provide specified exemptions for eligible claimants on qualifying interest income and capital gains from government securities.

According to the Ministry of Finance's policy announcement, the exemption covers qualifying interest income and capital gains arising from the sale, transfer, exchange or redemption of government securities, subject to the applicable statutory conditions. The exemption applies to qualifying income arising on or after April 1, 2026.

Two dates matter when interpreting the new requirement:

These dates serve different purposes. April 1, 2026, determines the starting point for the qualifying income covered by the exemption. October 19, 2026, marks the commencement of the rules introducing Form 173A.

The underlying eligibility conditions continue to apply. Furnishing the form is a procedural requirement; it does not independently establish that an investor, security or transaction qualifies for the exemption.

For the policy background, consult the Ministry of Finance's factsheet on reforms to expand foreign participation in government securities.

Who Must Furnish Form 173A?

Form 173A applies to claims under the two specified entries of Schedule IV.

Other foreign investors, institutions and ordinary retail investors should not assume that the same exemption applies to them. Their eligibility must be assessed under the relevant statutory provisions.

The terminology also matters: FII and FPI should not automatically be treated as interchangeable legal categories in every context. Form 173A requests the SEBI registration number as an FPI/FII, while the applicable exemption provision determines which claimants qualify.

What Information Is Required in Form 173A?

Form 173A has two parts. Part A collects the claimant's basic information, and Part B records the government securities and related income covered by the exemption claim.

Part A: Basic information

The claimant must provide the prescribed identification and contact details.

BIS-specific exception: Note 4 to Form 173A expressly makes the TIN and SEBI registration number fields optional for the Bank for International Settlements. This exception applies to those two identification fields in Part A. It should not be extended to other fields or other claimants.

Part B: Government securities and income disclosures

Part B requires security-level information and details of the related holdings, transactions and income.

The form allows Part B to be repeated where required. Amounts must be entered in Indian rupees unless otherwise provided in the form.

A distinction worth preserving is that sale consideration and capital gains are not the same amount. Sale consideration is the amount received from selling a security. Capital gains represent the gain calculated under the applicable tax rules. Both are separate disclosures in Form 173A.

For practical preparation, claimants should reconcile the reported figures against their security-level records, transaction statements, interest records and capital gains calculations.

How Should Eligible Claimants Prepare for Form 173A?

Eligible claimants and their compliance teams can use this checklist to organize the information before completing the form.

• Confirm eligibility: Verify that the claimant falls within the relevant statutory category under Schedule IV, entry 13D or 13E.
• Verify identification details: Check the claimant's name, country of residence, address, PAN and tax year.
• Compile the securities inventory: Match each security to its ISIN, type and tenor.
• Reconcile opening and closing holdings: Verify the reported values as of April 1 and March 31.
• Compile purchases and sales: Reconcile purchase values and sale consideration with the relevant transaction records.
• Verify income disclosures: Reconcile interest received or accrued and capital gains against supporting records.
• Check the currency: Report amounts in rupees unless the form provides otherwise.
• Review the declaration: Arrange for the principal officer to review the information and complete the prescribed declaration and signature fields.
• Verify filing instructions: Confirm the applicable submission process and any deadline through official guidance before filing.

These are practical preparation steps, not additional statutory fields. The prescribed form remains the authority for what must be furnished.

What Are the Important Compliance Considerations?

Three points deserve particular attention.

Eligibility comes before form completion. Form 173A supports claims under specific statutory provisions. It does not extend the exemption to investors who fall outside those provisions.

The BIS exception is limited. BIS can leave the TIN and SEBI registration number fields optional under Note 4. This does not make every identification or financial disclosure optional.

Verify the filing process rather than assuming a deadline. The notification establishes the Form 173A information-furnishing requirement. Do not infer a separate due date, online submission workflow or specific late-filing penalty without checking the applicable official rules and guidance.

The form also includes a declaration confirming that the information is true to the best of the signatory's knowledge and belief and is consistent with the relevant provisions of Schedule IV. The principal officer should therefore review the disclosures before signing.

Where Can You Verify the Official Form and Rules?

Use primary government sources wherever possible:

• Official e-Gazette of India: Search for Notification G.S.R. 901(E), dated October 19, 2026, to verify the Income-tax (Seventh Amendment) Rules, 2026, Rule 281A and Form 173A.

• Ministry of Finance factsheet on government securities reforms: Provides the policy background and the effective date of the specified exemptions.

• Ministry of Finance FAQs on the BIS exemption: Explains the BIS exemption's scope and relevant policy context.

For compliance decisions, rely on the applicable statutory provisions and the notified form rather than financial news summaries alone.

Conclusion

CBDT Form 173A establishes a specific information-furnishing requirement for eligible claimants seeking exemptions on interest and capital gains from government securities under Schedule IV entries 13D and 13E of the Income-tax Act, 2025.

The practical priorities are to confirm eligibility, understand the applicable exemption, reconcile the required securities and income disclosures, and verify the official submission instructions. BIS has a specific exception for the TIN and SEBI registration number fields, but that exception should not be generalized to other disclosures.

Because the requirement is new, eligible claimants should consult the notified rules and seek qualified tax advice if the scope of eligibility, reporting treatment or filing procedure is unclear.