New Buyback Tax Rule: Relief or Blow for Investors? Expert Analysis
Your Money
M
Moneycontrol•01-02-2026, 17:52
New Buyback Tax Rule: Relief or Blow for Investors? Expert Analysis
- •Union Budget 2026 introduces a new buyback tax rule: income from share buybacks will now be taxed as capital gains, not dividends, applicable to all shareholders.
- •An additional tax (22-30%) will be imposed on promoters to prevent tax arbitrage misuse, aiming to ensure correct tax payments.
- •Revenue Secretary Arvind Srivastava clarifies this is a relief, not a tax increase, as buyback income is now capital gains, benefiting ordinary shareholders.
- •Experts from Anand Rathi Share and Stock Brokers see this as positive for ordinary investors, with lower capital gains tax rates (20% short-term, 12.5% long-term) compared to the 30% dividend slab.
- •The change makes buybacks less attractive for corporates but simplifies taxation and increases transparency, allowing promoters to adjust capital losses against buyback income.
Why It Matters: New buyback tax rules shift taxation to capital gains, benefiting ordinary investors while curbing promoter tax arbitrage.
✦
More like this
Loading more articles...
