Eyeing your share: Buyback will now be taxed as dividend income

Shareholders are already paying tax at slab rates on dividend received by them. The Budget proposals have gone a step ahead. Consideration received on buyback of shares will now be treated as dividend income in the hands of the shareholders. As a result, buyback will lose its sheen for investors soon. As the new scheme of taxation of buyback will apply only from Oct 1, companies may initiate buyback schemes at the earliest, to complete the process by Sept 30.