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Who are responisbile to pay tax on share buy back?

HITESH PATEL (manager accounts) (21 Points)

06 September 2019

for unlisted companies who is responsile to pay tax on share buy back? company or share holders

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4 Replies

Pranav Aggarwal (515 Points)
Replied 06 September 2019

company is liable to pay tax on buy back @ 23.296% on profit arising on buy back of shares

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Kapadia Pravin (17259 Points)
Replied 06 September 2019

Company is liable to pay buy back tax @ 20%
To be increased be surcharge of 7% or 12% (depending on size of company) and further added by education cess @ 4%

There is no further tax liability in the hands of shareholder as buy-back proceeds will become tax free receipt

Pranav Aggarwal (515 Points)
Replied 06 September 2019

can u pls define surcharge means in buy back??

when 7 or 12 % will levied

Kapadia Pravin (17259 Points)
Replied 06 September 2019

@ Pranav

....shall, be increased by a surcharge for the purposes of the Union calculated,—

(i) in the case of every domestic company,—(a) having a total income exceeding one crore rupees but not exceeding ten crore rupees, at the rate of seven per cent of such income-tax;

and(b) having a total income exceeding ten crore rupees, at the rate of twelve per cent of such income-tax;