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Infosys Share Buyback: The buyback will be taxed in the hands of investors as a dividend income under the head ‘income from other sources’ at the applicable income tax slab.
Infosys Share Buyback: How Much Will Your Gains Be Taxed?
Infosys Share Buyback: Infosys, the country’s second-largest IT services company, has announced its largest-ever share buyback programme worth Rs 18,000 crore. The record buyback entails Infosys buying 10 crore fully paid-up equity shares of a face value of Rs 5 each, representing up to 2.41 per cent of the total paid-up equity share capital, at Rs 1,800 per share.
“The Board of Directors of the company at their meeting held on September 11, 2025, has considered and approved a proposal to buyback equity shares for an amount of Rs 18,000 crore at a price of Rs 1,800 per equity share,” Infosys said in an exchange filing.
Infosys Share Buyback: Record Date
The company has not yet finalised the record date for the share buyback. The opening and closing dates for tendering the shares for the buyback will also be announced later.
Infosys Share Buyback: How Will Your Gains Be Taxed?
Shares of Infosys on Friday closed at Rs 1,525 apiece. However, the IT company has announced the buyback at Rs 1,800 apiece. So, suppose your shares are accepted under the buyback programme at the current price, you make a gain of Rs 275 per share. How will it be taxed?
Before October 1, 2024, the tax on buybacks used to be paid by the company on the income distributed. However, as part of the Union Budget 2024 announcement, any buyback after October 1, 2024, will be taxed in the hands of investors as deemed dividend under the ‘income from other sources’.
“As per the amendment in Budget 2024, tax on any buyback made after 1st October, 2024 will not be applicable in the hands of the Company. However, the tax will be payable by the recipient shareholder on the total amount received from the buyback as deemed dividend in accordance with the newly inserted provision of Section 2(22)(f),” Cleartax said in its blog.
So, the Infosys buyback will be taxed in the hands of investors as a dividend income under the head ‘income from other sources’ at the applicable income tax slab. For instance, if you fall in the 20% tax bracket, the Rs 275 will be taxed at the rate of 20% (Rs 55 per share).
It is important to note that shareholders cannot deduct the cost of acquisition of shares tendered in the buyback against this deemed dividend income.
However, there is a concept of a notional capital loss: For computing capital gains, the ‘consideration’ received is treated as nil, meaning the cost you paid for those shares (acquisition cost) becomes a loss under capital gains head which:
- Can be set off against other capital gains, and
- Can be carried forward for up to 8 assessment years.
Infosys Share Buyback: How To Apply?
If you want to participate in an Infosys buyback, here’s the step-by-step process:
1. Check the record date and ensure your Infosys shares are in your demat by that date. It is important to note that the record date has not been announced yet.
2. Read the Letter of Offer (LoF) to note buyback price, window, size and entitlement.
3. Check your entitlement (how many shares you can tender) and decide quantity (you may oversubscribe).
4. Log in to your broker and go to Corporate Actions → Buyback, select the Infosys buyback and enter quantity.
5. Or submit the Tender Form to your broker/registrar offline if you prefer paper submission.
6. Broker/DP will block/debit the tendered shares from your demat (you don’t pay money).
7. After the window closes, check the acceptance/scale-down announcement (pro rata if oversubscribed). The Infosys buyback represents up to 2.41 per cent of the company’s total paid-up equity share capital.
8. Accepted shares are debited and proceeds credited to your bank account via your DP (typically within a week or two).
Infosys Share Buyback Matches TCS’ Biggest-Ever Share Buyback
With this, Infosys matches the biggest-ever share buyback programme of IT major TCS announced in 2022. TCS had then bought back 4 crore equity shares at a price of Rs 4,500 per equity share for an aggregate consideration of Rs 18,000 crore.
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h…Read More
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h… Read More
September 13, 2025, 11:25 IST
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