From mint · Kirti Jha · · 1m 30s
CBDT Introduces Form 173A for Foreign Investors
New tax exemption rules for foreign investors on government securities require Form 173A disclosures.
In brief
New tax exemption rules for foreign investors on government securities require Form 173A disclosures. Eligible foreign investors must submit Form 173A to claim tax exemptions on government securities interest and capital gains. Originally reported by mint.
New Tax Exemption Rules
CBDT notifies Form 173A for eligible foreign institutional investors and Bank for International Settlements to claim tax exemptions on government securities interest and capital gains.
Form 173A Requirements
The form requires disclosures on holdings, interest income, and capital gains for investors seeking tax exemptions under entries 13D and 13E of Schedule IV of the Income-tax Act, 2025.
Who Can Claim Exemptions
The provisions cover specified foreign institutional investors under entry 13D and the Bank for International Settlements under entry 13E of Schedule IV for eligible interest income and capital gains.
Information Disclosed
The first part requires investor name, country of residence, address, PAN, tax year, email, contact number, tax identification number, and SEBI registration number where applicable.
Investment Details
The second part requires security-wise details including ISIN, type, tenor, holdings value at start and end of tax year, and capital gains earned during the tax year.
Why Introduced
The new form provides a prescribed reporting mechanism for claiming specific exemptions from qualifying income on government securities starting April 1, 2026.
Effective Date
The amended rules came into force upon publication in the Official Gazette, applying to qualifying income from government securities on or after April 1, 2026.
The one thing
Eligible foreign investors must submit Form 173A to claim tax exemptions on government securities interest and capital gains.
