Share Buyback Tax Calculator
Work out the tax on shares you tender in a company buyback, under the rules from 1 April 2026 and the earlier dividend rules, and compare the two. Runs in your browser; nothing is uploaded.
A worked example
Say a company buys back 500 of your shares at Rs 1,800 each, for Rs 9,00,000, and your cost for those shares was Rs 1,200 each, or Rs 6,00,000, held for 30 months. As a regular, non-promoter shareholder, for a buyback on or after 1 April 2026 this is a long-term capital gain of Rs 3,00,000, taxed at 12.5% plus cess, which comes to Rs 39,000. Had you tendered the same shares before 1 April 2026, the full Rs 9,00,000 would instead have been taxed as dividend at your slab rate, which is why the date of the buyback changes the maths completely.
Understanding the calculation
- On or after 1 April 2026
- Gain is proceeds minus cost. The short-term or long-term rate applies by holding period, with the promoter extra tax added if you are a promoter, then 4% cess.
- 1 October 2024 to 31 March 2026
- The whole amount received is dividend at your slab rate. The cost becomes a capital loss, short-term or long-term by holding period, that can be set off against other capital gains but not against the dividend.
Common questions
How are share buybacks taxed now?
For buybacks on or after 1 April 2026, the money you receive is taxed as a capital gain: the buyback price minus your cost, at the usual short-term or long-term rate, and a loss stays a capital loss. This restored capital gains treatment under Section 69 through the Finance Act 2026.
How were they taxed before that?
For buybacks from 1 October 2024 to 31 March 2026, the full amount you received was taxed as dividend at your slab rate, with 10% TDS, and your purchase cost became a separate capital loss that you could set off against other capital gains. This page shows both so you can compare.
What is the extra tax on promoters?
From 1 April 2026, a promoter pays an additional tax on buyback gains on top of the normal capital gains tax: 2% short-term and 9.5% long-term for a domestic company promoter, and 10% short-term and 17.5% long-term for other promoters such as individuals, per Section 69 of the Income-tax Act, 2025. A 12% surcharge is then charged on that additional tax, not on the whole gain, following the Income Tax Department's own clarification. It applies to buybacks under Section 68 of the Companies Act, 2013.
Which rate applies to my gain?
For listed shares held 12 months or less the short-term rate is 20%, and above 12 months the long-term rate is 12.5%. For unlisted shares the long-term period is 24 months, the long-term rate is 12.5% and short-term gains are taxed at your slab rate. Whether a listed buyback qualifies for the Rs 1.25 lakh long-term exemption depends on how it is done, so it is an option you can switch on here.
Is there TDS on a buyback?
For the earlier dividend treatment there was 10% TDS under Section 194. For buybacks on or after 1 April 2026 the payer or your broker may handle tax differently, so treat any deduction as an advance against the tax shown here.
What does this not cover?
Non-resident shareholders, surcharge, and cases where a buyback is done outside Section 68 of the Companies Act. It assumes you are a resident individual or a domestic company as chosen.