In the stock market, companies have multiple ways to reward their shareholders. They can increase dividends, reinvest in growth, or sometimes buy back their own shares. Among these, a buyback is a strategic move that’s been gaining attention, especially with large companies like Infosys making headlines.
A buyback is basically a company buying its own shares from the people who already hold them. Instead of using its cash to open new offices, hire aggressively, or chase acquisitions, the company chooses to return money to the investors. Most firms do this when they’re sitting on excess cash or when they believe the market is undervaluing their stock.
Why it matter?
Because once those shares are bought back, they disappear from the market. And with fewer shares in circulation, each remaining share automatically represents a slightly bigger claim on the company’s profits. It’s a quiet way of increasing value per share without changing anything about the business itself. That’s the logic behind why buybacks are often seen as shareholder-friendly.
And this brings us to Infosys.
Infosys has announced a ₹18,000-crore share buyback, the largest in its history and the record date to determine shareholder eligibility is November 14, 2025.
Due to the T+1 settlement cycle, to be eligible to participate, you must hold Infosys shares in your Demat account as of the end of the record date. This means the last day to purchase the shares to be eligible was November 13, 2025.
The company plans to buy back 10 crore shares, around 2.41% of its equity, through a tender offer at ₹1,800 per share, which is a premium of roughly 16–19% above the market price (around ₹1,503 on the record date).
If the premium looks attractive, how much will you get after taxes!
How the Infosys buyback will be taxed?
Earlier, gains from buybacks were tax-free in the hands of shareholders, but from Oct 2024, buyback payouts are treated as deemed dividend under Section 2(22)(f). It’s reported under the head Income from Other Sources and taxed at your slab rate. Here, the entire ₹1,800 per share is taxable and you cannot deduct the original price you paid for the shares.
So whether you bought Infosys at ₹1,700, ₹1,300, or even ₹900, the tax applies to the full ₹1,800.
But what happens to your original cost?
When your shares get accepted in the buyback, your purchase cost becomes a capital loss.
Depending on the holding period, the loss can either be short term (holding period < 12 months) or long term (holding period > 12 months). In case of STCL, you’ll be able to adjust them against both STCG and LTCG, whereas LTCL can only be adjusted against LTCG.
You can also use this capital loss to carry it forward for 8 years against your future gains.
What will Infosys deduct at the time of payment?
Infosys will take a 10% TDS cut on your buyback payout – that’s the standard rule for resident shareholders, since the payout is treated as deemed dividend income. This rate applies if your PAN is valid and linked to Aadhaar; if not, it jumps to 20%. For NRIs, the TDS rate is 20% plus applicable surcharge and cess.
And this TDS isn’t your final tax. When you file your ITR, the entire ₹1,800 per share has to be reported as dividend income, claim the TDS that Infosys has already cut as credit, and then pay any additional tax based on your slab rate. So, if you fall in a higher tax bracket, you’ll end up paying more than the 10% Infosys deducts.
For instance,
- If you’re in a lower slab (5% or 10%): Infosys will have deducted more tax than required, so you’ll likely get a refund.
- If you’re in a higher slab (20% or 30%): you’ll settle the remaining tax when you file your ITR.
So which buyback did you participate in? Let us know below!