Tax Implications for Buyback of shares

What are Tax implications on Buy Back of Shares by company for retail investors ?

Can anyone explain in details?

Thanking you,


It all depends on if STT is collected for the buyback transaction or not. If STT is collected, it is like a normal sell transaction, if not it would be an offline transaction - different rules apply for LTCG and STCG in these cases.

Earlier buybacks were considered offline transactions because STT was not collected, but then the rules changed and now the exchanges (BSE, NSE) collect STT for buybacks also. Once STT collection criteria is fulfilled the standard rules of LTCG and STCG apply. You can verify if the STT is paid or not when your brokerage sends you the buyback transaction statement.

I am not an expert so please consult one before using this advice.