Buyback Tax 2024: Why Share Buybacks Now Hurt Investors

From 1 Oct 2024, the whole buyback amount is a deemed dividend taxed at your slab rate — up to ~35.88%.

You get NO cost deduction against that dividend; your purchase price becomes a separate capital loss instead.

That capital loss only offsets capital gains, and can be carried forward 8 years if unused.

Companies stopped paying the old ~23.3% buyback tax, so the burden shifted fully to shareholders.

Low-slab and zero-tax investors can still benefit; high earners often lose out versus an open-market sale.