New Delhi, 19 October 2026: The Central Board of Direct Taxes (CBDT) has issued Notification No. 137/2026, introducing the Income-tax (Seventh Amendment) Rules, 2026.
The amendment inserts Rule 281A and introduces Form No. 173A for furnishing information when claiming specified exemptions on interest income and capital gains arising from Government securities under Schedule IV of the Income-tax Act, 2025.
Key Highlights of the Notification
1. Introduction of Rule 281A
The new rule requires assessees claiming exemptions covered by Serial Numbers 13D and 13E of the table in Schedule IV to furnish the prescribed information in Form No. 173A.
2. New Form No. 173A
The form prescribes basic taxpayer information and details of eligible Government securities and the income for which exemption is claimed.
3. Details Required in the Form
- Name and country of residence of the assessee.
- Address and Permanent Account Number (PAN).
- Tax Identification Number (TIN), where applicable.
- SEBI registration details as FPI/FII, where applicable.
- Tax year for which exemption is claimed.
- International Securities Identification Number (ISIN).
- Type and tenor of Government securities.
- Investment, purchase and sale values.
- Interest income and capital gains for the relevant tax year.
4. Government Securities Covered in Reporting
The prescribed form provides categories including Treasury Bills, fixed-rate bonds, floating-rate bonds and State Development Loans, along with an option to specify other securities.
5. Effective Date
The Income-tax (Seventh Amendment) Rules, 2026 came into force on their publication in the Official Gazette on 19 October 2026.
Importance for Tax Practitioners
The notification is particularly relevant to professionals advising eligible investors, foreign portfolio investors and other taxpayers seeking the specified exemptions on Government securities.
Tax professionals should review the eligibility provisions under Schedule IV, identify the applicable reporting requirements and ensure that the relevant information is maintained accurately.
Important Advisory
Form No. 173A relates to specific exemptions under Schedule IV, Table Serial Numbers 13D and 13E. It does not mean that all Government securities investments or all investors qualify for exemption.
Members are advised to examine the notification and applicable statutory provisions before claiming or advising on an exemption.
Official Notification: CBDT Notification No. 137/2026 dated 19 October 2026.
Gazette Reference: G.S.R. 901(E).
Source: Income Tax Department, Ministry of Finance, Government of India.
Read Official CBDT Notification (PDF)
Published for the information of KSTPA members and tax professionals.