CURRENT AFFAIRS

Detailed explanation-1: -Buyback tax was introduced on unlisted companies in 2013 and extended to listed companies from July 2019. Both listed and unlisted companies have to pay the tax at 20% plus surcharge at 12% and health and education cess of 4%, aggregating to 23.30% of the ‘distributed income’.

Detailed explanation-2: -A buyback tax of 20% was introduced in 2013, payable by an unlisted company on buyback, with the shareholder’s capital gains being exempted.

Detailed explanation-3: -As per section 10(34A), any income arising to a shareholder (including ESOP-shares) on account of buyback of shares by the company shall be exempt in the hands of such shareholders. Further, as per section 115QA, the tax 20% shall be paid by the unlisted company on the buyback of its shares.

Detailed explanation-4: -3) Buy-back should not be more than 25% of the total paid up capital and free reserves of the company. 4) Buy-back of equity shares in any financial year must not exceed 25% of its paid up equity capital.

Detailed explanation-5: -Under Section 127(A) of the Tax Code, as amended by the Tax Reform for Acceleration and Inclusion (TRAIN) Law, the STT rate is 6/10 of 1% based on the gross selling price or gross value in money of the shares of stock sold, bartered, exchanged or otherwise disposed.