Income Tax on buy-back of shares

• December 3, 2019
• CA Chandan Agarwal's Office

In simple terms, buy-back of shares means the situation when the company repurchases its own shares. A company may opt to buy-back the shares under any other the following situations –

-When the quoted price on the stock exchange for the company’s share does not represent the true value of the shares; or

-When the company doesn’t have paths to invest its accumulated funds, and it goes for buy-back of shares with a view to return the capital; or

-When the promoters are planning to increase their shareholding in the company.

The reason behind introducing the buy-back provisions under the income tax –

Read more on: https://taxguru.in/income-tax/income-tax-buy-back-shares.html