No Form 173A? Your G-Sec Tax Break Disappears

CBDT has introduced Form 173A under the Income-tax Rules, 2026. If you hold government securities and want to claim tax exemptions on interest or capital gains, you must file this form proactively — or the exemption is lost and TDS applies at full rates.

Here's what happened: CBDT has notified Form 173A under the Income-tax Rules, 2026, to allow investors to formally claim tax exemptions on interest income and capital gains from government securities.. The form must be filed proactively by the investor — it is not automatically triggered by the broker, RBI Retail Direct, or the paying authority; missing it means full TDS deduction.. The notification applies to existing government securities holders as well as new buyers, making it immediately relevant to anyone who already holds G-Secs or sovereign bonds..

What you should do: Check your G-Sec holdings on RBI Retail Direct, your demat account, or broker platform and confirm whether any interest or capital gain exemption applies to your specific securities.. Download and file Form 173A through the income tax e-filing portal (incometax.gov.in) before your next scheduled interest payment date to avoid full TDS deduction.. If TDS has already been deducted on eligible G-Sec interest this financial year, claim it back by filing your ITR accurately — do not assume it is automatically adjusted..

File Form 173A before the interest credit date, not after — once TDS is deducted without the form on record, you must wait until ITR refund processing to recover the money, which can take months.

For readers weighing their credit and loan options, our personal loan guide and CIBIL score resources put this update in context.