Foreign institutional investors and the Bank for International Settlements must provide detailed investor and transaction data to claim exemptions on interest and capital gains under India’s new income-tax framework.
The Central Board of Direct Taxes has set out a new reporting form for investors seeking tax relief on income from government securities, in a move that tightens documentation requirements under India’s newer income-tax framework. According to a government notification issued on October 19, the board has introduced Form 173A through the Income-tax (Seventh Amendment) Rules, 2026, to support exemption claims on both interest income and capital gains linked to eligible government securities.
The filing is aimed at a narrow group of claimants. The exemptions under entries 13D and 13E of Schedule IV of the Income-tax Act, 2025, apply to foreign institutional investors and the Bank for International Settlements, while ordinary investors remain outside the scope of the relief. Business Standard reported that the new form is intended to establish eligibility before the exemptions are granted, rather than after the fact.
Form 173A asks for a broad set of details, including the taxpayer’s name, country of residence, address, Permanent Account Number, tax identification number in the country of residence, Securities and Exchange Board of India registration number as a foreign portfolio investor or foreign institutional investor, tax year, email address and contact number. It also requires transaction-level information on government securities, such as the International Securities Identification Number, the type of security, tenor, opening value as of April 1, purchases during the year, sale proceeds, holdings at year-end, gross interest received or accrued and capital gains earned.
The form covers Treasury bills, fixed-rate bonds, floating-rate bonds, State Development Loans and other government securities. It also includes a declaration that the information provided is true and consistent with Schedule IV of the Income-tax Act, 2025, and it must be signed by the principal officer. The notification says the tax identification number and Sebi registration number are optional for the Bank for International Settlements. The Income-tax Rules, 2026, were first notified on March 20 and have since been amended several times.
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