From April 1, 2026 buyback proceeds taxed as capital gains
Big update for anyone following the stock market: from April 1, 2026, if you make money from a company buying back its own shares, that cash will be taxed as capital gains, just like if you sold your shares directly.
The goal? To close tax loopholes and treat buybacks more like dividends when it comes to taxes.
Promoters face 22% and 30% taxes
If you're an individual investor, buyback earnings are now taxed as capital gains, whereas they were previously largely tax-free for shareholders.
But for corporate promoters, the new rules mean higher taxes: 22% for corporate promoters and 30% for non-corporate ones.
Because of this change, companies might start favoring dividends over buybacks or even put more money into things like R and D or expansion instead of just returning cash to shareholders.