IPO Buyback Tax Calculator
Buyback taxation changed again in Union Budget 2026 — proceeds are now taxed as capital gains in the shareholder's hands, with an additional levy for promoters. This calculator uses the current regime.
Tax Payable (LTCG @ 12.5%)
₹0
Taxable gain: ₹0.
Gross Gain
₹3,000
Net Proceeds (after tax)
₹18,000
Company also withholds TDS (10% resident / 20% non-resident) on payment — a separate withholding, not shown above, adjusted against your final liability at return filing.
How the IPO Buyback Tax Calculator works
This is a rules change worth flagging directly: for buybacks between 1 Oct 2024 and 31 Mar 2026, the entire buyback amount was taxed as deemed dividend at the shareholder's income-tax slab rate. That regime closed on 31 March 2026. Union Budget 2026 replaced it, effective 1 April 2026, with a capital gains regime: your taxable gain is buyback price − cost of acquisition, classified as STCG or LTCG by how long you held the tendered shares, and taxed at the same 20%/12.5% rates (with the ₹1.25 lakh LTCG exemption) used for any other equity sale. This calculator computes the current (post-1-April-2026) regime, since that's what applies to any buyback happening now.
Promoters (and non-corporate promoter entities) carry an additional levy on top of ordinary capital-gains tax, reported as an effective total tax burden of 30% for individual/ non-corporate promoters and 22%for promoter companies. The exact base-rate-plus-additional-levy mechanics aren't fully detailed in public guidance at the time of writing, so this calculator applies the reported effective rate directly to the full gain for promoter cases — treat this as an estimate and verify with a CA before relying on it for an actual promoter buyback.
Separately, the company deducts TDS on buyback payments — 10% for resident shareholders, 20% for non-residents — at the time of payment. This is a withholding, not your final tax liability, so it is not subtracted in the result above.
Disclaimer: This calculator is for educational purposes only and does not constitute investment advice. Always read the Red Herring Prospectus and verify current rates before applying for any IPO.