Buyback Taxation

Hi @Murali_Subramanian,

Buybacks after 1st Oct 2024 are treated as deemed dividends and taxed at your income tax slab rate, even if you incur a capital loss. In your case:

  • Purchase price is ₹28,507 per share
  • Buyback price is ₹28,000 per share
  • Loss is ₹507

Even though you have a loss, the company will deduct TDS at 10% (mandatory for residents) on the buyback proceeds.

And this capital loss of ₹507 can be carried forward for 8 years to offset future LTCG, but it does not reduce the buyback tax at the time of the transaction.