I had reliance retail shares which was bought back by Reliance at their declared price. however, they paid it out as a dividend rather than a sell transaction (buy transaction for them). Hence i am required to pay tax on this amount which actually is the selling price for me. if this was reflected as a buy/sell transaction then i was not liable to pay any tax but because it being shown as dividend (which is not the case as we have not received any other amount from them), i have to pay tax on that amount.
Kindly advise what can be done to get this rectified or ?
Consult a tax advisor to rectify the issue and request Reliance to correct the transaction type, ensuring it reflects as a sale rather than a dividend.
Reliance has been very smart. in order to increase their profits, they have not made this a buy back but as a reduction in capital expenditure. By paying this as dividend they have shown this as expenses in their books. and hence now even after bearing losses due to this “buy back” i have suffered losses of over 2 lakhs and plus i am required to pay tax on dividend which is sheer ridiculous and cheating by Reliance.