Buy-backs have been the topic of discussion in corporate corridors in India since Budget (No. 2) 2019 has extended the existing tax on buy-back of shares to listed shares. Earlier, listed companies used buy-backs as an alternative to reward shareholders, as dividend was proving an expensive alternative from a tax perspective.
A buy-back is a scheme by which a company repurchases a certain number of its outstanding shares usually at a price higher than the prevailing market price/ fair value of the shares. In this article, we have tried to capture the implications of buyback under various regulations and certain open issues.
Read more on: https://taxguru.in/income-tax/buy-backs-proceed-caution.html
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