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How share buyback amount is taxed

The New Indian Express Coimbatore

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October 27, 2025

Payment made by a company to buy back shares is deemed as ‘dividend income’ in the hands of shareholders

- DIPAK MONDAL @New Delhi

How share buyback amount is taxed

WHEN promoters of Infosys Ltd — including NR Narayana Murthy, Sudha Murthy and Nandan Nilekani, among others — decided to opt out of the company’s ongoing share buyback programme despite the offer carrying a hefty premium of more than %300 per share over the prevailing market price, everyone was curious what the reason could be.

Experts claim the decision was driven by tax consideration as participating in the buyback offer would result in steep tax implications for individual shareholders.

On September 11, 2025, Infosys announced a buyback of equity shares at 71,800 per share, compared with the market price of 21,510 on that date. The stock currently trades at around 21,523 implying a premium of 2277 per share under the buyback offer.

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