These Companies Stand To Gain From The Buyback Tax Relief
Buybacks worth Rs 14,000 crore announced before the July budget will get relief as Finance Minister Nirmala Sitharaman exempted them from 20 percent tax that had made share repurchases costlier.
“In order to provide relief to listed companies which have already made a public announcement of buyback before July 5, 2019, it’s provided that tax on buyback of shares in case of such companies shall not be charged,” Finance Minister Nirmala Sitharaman said during a press meet.
Wipro Ltd. and Adani Ports and Special Economic Zone Ltd. which announced buybacks before July 5 and have completed the repurchases stand to gain the most.
Here’s a list of other companies that announced buybacks before July 5 but have not proceeded yet:
In the budget, Sitharaman introduced 20 percent tax on buybacks to discourage the practice of preferring share repurchases over dividend. The relief from the tax is among other measures, including a proposed cut in the corporate tax rate, to boost the economy after growth fell to its lowest in six years. The step, according to Sitharaman, will promote growth and investment, and cost the government Rs 1.45 lakh crore in revenue.