Form 173A notified to claim exemption on G-Sec gains

The Central Board of Direct Taxes (CBDT) has notified Form 173A under the Income-tax Rules, 2026, for taxpayers availing exemption on interest income and capital gains on government securities. Eligible taxpayers must disclose details of their assets, income received and securities bought or sold during the tax year in the new form.

The change has been notified through the Income-tax (Seventh Amendment) Rules, 2026, issued by the Ministry of Finance. The amended rules came into force on October 19, 2026.

How will the new reporting requirements impact investors’ tax compliance?

As per Dhruv Advisors, the new form requires detailed disclosures covering securities holdings, purchases and sales, interest income and capital gains for the relevant tax year.

It also calls for investor identification and registration details, along with security-level information such as the type of instrument, tenor and value of holdings.

Also read: Transferring immovable property? How TDS compliance is now simpler with new Form 141

Explaining the importance of Form 173A further, Dhruv Advisors says, “The prescribed reporting requirements could have implications for eligible investors’ tax compliance processes, record-keeping practices and the documentation needed to substantiate exemption claims. The development also highlights the importance of aligning tax reporting with securities transaction data, particularly for foreign investors operating in the Indian government securities market.”

Information to be furnished for claiming exemption on interest and capital gains from Government securities is as follows-

Part A details:

• Full name
• Country of residence
• 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

Part B: Details of government securities and exempt income

The second part requires taxpayers to provide investment-wise details of the government securities for which the exemption is claimed. These include:

• International Securities Identification Number (ISIN)
• Type of government security
• Tenure of the security
• Total value of securities held on April 1
• Value of securities purchased during the tax year
• Sale consideration received from securities sold during the tax year
• Total value of securities held on March 31
• Gross interest received or accrued during the tax year
• Capital gains earned during the tax year

When will the new rule come into effect?

The Income-tax (Seventh Amendment) Rules, 2026, will take effect from the date of publication in the Official Gazette, October 19, 2026. The notification was issued under Section 533, read with the relevant provisions of the Income-tax Act, 2025.