The Central Board of Direct Taxes (CBDT) has notified the Income-tax (Seventh Amendment) Rules, introducing Form No. 173A and Rule 281A to establish a mandatory information-reporting mechanism for claiming tax exemptions on interest and capital gains derived from Government securities.
Key Highlights of Form 173A
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Purpose: The form provides a standardized reporting framework to verify exemption claims through structured disclosures covering taxpayer identity, government securities holdings, transactions, and earned income.
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Eligible Beneficiaries:
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Foreign Institutional Investors (FIIs): Covered under Entry 13D of Schedule IV (as defined in Section 210(6)(a) of the Income-tax Act).
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Bank for International Settlements (BIS): Covered under Entry 13E of Schedule IV.
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Exempted Income: Any interest on government securities and any capital gains arising from their sale, exchange, or transfer.
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Specific Relaxations: The BIS has been granted minor reporting flexibilities, making the disclosure of its Tax Identification Number (TIN) in its country of residence and its SEBI registration number optional.
