Tax Reforms Make Share Buybacks Less Attractive for Promoters

Imagine a company wants to buy back its shares.

Before, the company paid a tax.

Now, the shareholders pay the tax, and it's a lot more!

For people who own a lot of shares (promoters), this means they have to pay a much bigger tax on the money they get from selling their shares back to the company.

The whole amount they get is taxed, not just the profit.

That's why some people are choosing to sell their shares in the open market instead, where they might pay less tax.

Tax experts think the rules need to change so share buybacks are fair again.