CBDT notifies Form 173A for tax exemption claims on govt bonds
In short
The CBDT has notified Form 173A for some foreign investors and the Bank for International Settlements. The form asks for details on holdings, interest income and capital gains so they can claim tax exemptions on government securities.
This matters because it sets the paperwork for exemptions under the Income-tax Act, 2025, from April 1, 2026. The reporting does not say how many investors will use it or how much tax relief is involved.
What the reporting says
The Central Board of Direct Taxes has notified Form 173A for eligible foreign institutional investors and the Bank for International Settlements to claim tax exemptions on government securities. The form requires disclosure of holdings, interest income and capital gains under the Income-tax Act, 2025, with exemptions linked to recent amendments and starting from April 1, 2026. What remains unclear is how many investors will use the form and how quickly the process will scale.
Why it matters
The Central Board of Direct Taxes has notified Form 173A for eligible foreign institutional investors and the Bank for International Settlements to claim tax exemptions on government securities. The form requires disclosure of holdings, interest income and capital gains under the Income-tax Act, 2025, with exemptions available from April 1, 2026. The reporting suggests a formal compliance step for eligible investors, but does not give uptake estimates or fiscal impact.