The Central Board of Direct Taxes (CBDT) has added a new reporting form for exemption on income from government securities, according to a Corplawupdates summary published on 20 October 2026. Notification No. 137/2026, dated 19 October, is the Income-tax (Seventh Amendment) Rules, 2026. It inserts Rule 281A and Form 173A into the Income-tax Rules, 2026. Spectate Media has not seen the Gazette text.
Who must file
Rule 281A requires anyone claiming exemption under Schedule IV of the Income-tax Act, 2025, Table serial numbers 13D (interest on government securities) and 13E (capital gains on transfer of government securities) to furnish Form 173A. The summary says the word "shall" makes it mandatory, and that the form mainly affects non-resident investors such as foreign portfolio investors. It is inconsistent on whether residents must also file. The exemption itself is not new; only the reporting is.
What the form asks for
Part A covers the claimant's identity: name, country of residence, address, PAN, tax identification number in the country of residence, SEBI registration number for foreign portfolio investors, tax year and contact details. Part B covers each government security: its ISIN, type and tenor, value on 1 April and 31 March, purchases, sale consideration, gross interest and capital gains. The summary says the tax identification and SEBI fields are optional for entities such as the Bank for International Settlements.
What is not stated
The summary gives no deadline, does not say whether the form is filed with the return or separately, and does not describe penalties. It says only that the exemption cannot be claimed without the prescribed information. The rule applies from the date of Gazette publication, 19 October 2026.
Key numbers
- Notification: 137/2026 (Dated 19 October 2026)
- New provision: Rule 281A (With Form 173A)
- Exemption entries covered: 2 (Schedule IV, 13D and 13E)
- Deadline: Not stated (In the summary)
What boards and CFOs should note
Three points stand out. First, investors and custodians claiming this exemption need security-level data ready. Second, the form's filing route and timing are still to be confirmed from the Gazette text. Third, treasury teams that hold government securities should check whether they are covered.
Source: Corplawupdates, 20 October 2026. This is a summary of a news report, published as general information. It is not legal, tax or investment advice.
This article is journalism and commentary. It is not a recommendation to buy or sell any security, and it is not professional advice. Read the full disclaimer.
