• SENSEX
    NIFTY 50
Information Technology

Will buyback tax discourage IT companies' structured buyback programs?

Updated : July 08, 2019 12:44 PM IST

On Friday, finance minister Nirmala Sitharaman proposed to extend the buyback tax at 20 percent to listed companies as well. The step, taken to discourage the practice of avoiding Dividend Distribution Tax (DDT) through buyback of shares by listed companies, came into effect on July 5.
In the past two years, total cash returned to TCS shareholders comprised of 60 percent of share buyback and 40 percent of dividend payment. Wipro, on the other hand, has largely used buybacks - 90 percent of the payout in the past two years, the report said. 
Kotak said that the buyback program is done post the tax deduction on the excess cash and the imposition of the new tax on the dividends disbursed is likely to make huge dents in the profit of these companies. 
Will buyback tax discourage IT companies' structured buyback programs?
primo org
Have you signed up for Primo, our daily newsletter?
It has all the stories and data on the market, business, economy and tech that you need to know.
cnbc two logos
To keep watching CNBC-TV18, India's No. 1 English Business News Channel, call your Cable or DTH Operator and subscribe now for just Rs. 4 per month. You can also subscribe to CNBC-TV18 Prime HD for Re 1/- per month.Find out more

You May Also Like

Live TV