Budget 2019: Proposed taxation on share buybacks puts IT firms in a spot

Domestic IT services firm may prefer dividend payout over buyback to reward investors

With the Union Budget proposing a 20 per cent tax on buyback of shares by listed companies, IT services companies are likely to opt for more dividend payout rather than following an elaborate process to do a share repurchase. Currently, buyback is taxable only for unlisted companies but if FM Nirmala Sitharaman's proposal is approved by the Parliament, it will be extended for the listed firms as well.  

In the last three years, most