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Buybacks down to a trickle after tax tweak
Business Standard
|May 06, 2025
Share buybacks have all but disappeared following a rule change on October 1 last year that shifted the tax burden from companies to shareholders.
Under the revised norms, buyback proceeds are taxed as dividends at the shareholders' applicable income-tax rates, significantly increasing the liability for high-networth individuals and institutional investors in the highest tax bracket.
Since the change, only two buybacks have been completed: A ₹360 crore repurchase by ferro alloys manufacturer Nava and a ₹72 crore offer by online matrimonial services provider Matrimony.com.
"Buybacks have dried up since the tax-rule change, which aligned their taxation with dividends. Despite a bear market since October—a period when buybacks typically thrive—activity has been negligible," said Pranav Haldea, managing director, Prime Database.
Cette histoire est tirée de l'édition May 06, 2025 de Business Standard.
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