SEBI Buybacks Return: How Your Gains Get Taxed?
SEBI is bringing back open-market share buybacks from August 2026. If a company buys back your shares, your profit is taxed as capital gains — not like before when the company paid the tax. Here's what you need to know before you sell.
Skipping a buyback tender could cost you more than 3 months of chai money in missed tax savings.
Your buyback gains will now be taxed at this rate under new SEBI rules
Key Takeaways
Check how long you have held the shares: if over 12 months, you pay 12.5% LTCG — time your participation accordingly.
Calculate your actual post-tax gain before tendering shares — compare it with simply selling on the open market at the current price.
Consult your CA if buyback proceeds push your total annual income into a higher tax slab, as it may change your overall tax liability.
SEBI is bringing back open-market share buybacks from August 2026. If a company buys back your shares, your profit is taxed as capital gains — not like before when the company paid the tax. Here's what you need to know before you sell.
Here's what happened: SEBI has reintroduced open-market share buybacks via stock exchanges, effective 1 August 2026, after years of restrictions.. Under new rules, capital gains tax now falls on the shareholder — short-term gains taxed at 20%, long-term at 12.5% above ₹1.25 lakh.. Previously, buyback tax was paid by the company at 20% — so investors received proceeds tax-free; that advantage no longer applies..
What you should do: Check how long you have held the shares: if over 12 months, you pay 12.5% LTCG — time your participation accordingly.. Calculate your actual post-tax gain before tendering shares — compare it with simply selling on the open market at the current price.. Consult your CA if buyback proceeds push your total annual income into a higher tax slab, as it may change your overall tax liability..
If your total long-term capital gains for the year are still under ₹1.25 lakh, tendering in a buyback could be completely tax-free — plan your participation timing around this annual exemption limit.
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- [1]“Sebi reintroduces open-market share buybacks: How your gains will be taxed and what to consider before participating” mint - money · 8 Jul 2026
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