Budget impact: Infosys, 8 others face 20% tax burden on share buyback

These companies, which are buying back shares, will see costs rising

Nine companies, including technology major Infosys, which have active buyback programmes, are staring at an unexpected tax burden.

The Union Budget on Friday made it mandatory for listed companies to pay additional tax at 20 per cent on share buybacks. The move, aimed at discouraging the practice of avoiding the dividend distribution tax, came into effect on July 5, 2019, according to the Finance Bill.

“The effect of this provision is that a listed company whose buyback is open now would be taxed at 20 per cent, plus the surcharge and cess on the amount of consideration paid, less the