Is this Rs 6142 non-taxable earnings?

Equity - Buyback
Symbol ISIN Entry Date Exit Date Quantity Buy Value Sell Value Profit Period of Holding Fair Market Value Taxable Profit Turnover
TCS INE467B01029 2020-07-27 2022-03-25 1 2214 4500 2286 606 0 2286 0
TCS INE467B01029 2021-08-04 2022-03-25 1 3298 4500 1202 233 0 1202 0
TCS INE467B01029 2021-09-24 2022-03-25 1 3872 4500 628 182 0 628 0
TCS INE467B01029 2021-10-26 2022-03-25 2 6974 9000 2026 150 0 2026 0

Total earnings = Rs 6142

I downloaded the report, it says I sold 5 TCS shares in buyback. But in before Email, it was mentioned as 3

Dear Shareholder,

Hope this email finds you well and that you and your family are healthy and safe.

With reference to the TCS Buyback 2022, through tender offer route, please find below the number of equity shares held by you on the Record date i.e. Wednesday, February 23, 2022 and your Buyback entitlement in terms of number of Equity shares:

Folio Number/DP and Client ID No. of Equity Shares held by you on the Record Date Buyback Entitlement in terms of no. of Equity Shares

The way I understand the statement and your message is that TCS was bound to buy back a minimum of 3 shares, in case you tendered 3. However, you must have tendered 5 and you were one of the lucky ones from whom TCS bought back 5 as against their commitment of 3.

Disc: Not an expert just using common logic. I am a shareholder of TCS.

1 Like

I was in a hurry and lazy and didn’t phrase my question well. My main question is whether the revenue from this buyback is taxable?

Not lucky, I bought 7 or 8 or 12 shares (not exactly sure) for the buyback (I owned the remaining shares well before that). The share price was higher than the current price (only 5 shares are sold in the buyback).

afaik buyback is not taxable in the hands of the shareholder through tender offer route.

The tax is paid by Co like earlier in case of Dividends (DDT). Now Dividend income is taxable in the hands of the recipient.

1 Like

Hello @MKDan ,
Thank you for a wonderful question as you said will my buyback share will levied by any tax. That raised on 25 March 2022. So here is answer as per amendment of financial act 2019 you will be taxed by section 46A capital gain on buyback share price - cost of aqu. for your last 4 buy back share you will be charged 15% and and 1 buy share holding holding period more that one year you will be tax exempt upto 1lac .

*Note that tax on long term capital gain would be charged if you sold more that 1lac on the financial year .

You will be penalized if you won’t pay tax on this amount will filing itr as per tax evasion. So don’t hold back this account as you would have maintained books of accounts for this which would be hold by any tax payer over 6 year as per IT act. And also book of accounts is compulsory for individual whose income is more that 2.5 lac and income generated by business would be 1.2 lac or gross sale is greater than sum of 10lac.

*Note that go with your own study .

1 Like

@247NH None of that is applicable in this case.

OP has no tax liability.

Just relax. As a shareholder, you don’t have to pay anything on buyback income. Everything is tax free.
Check this article for reference.


Okay it would be only consider incase the share is of foreign company. So we would have considered 2 share for capital gain as buy back quantity is 3 share as per mentioned by stock exchange. @MKDan should raise this concern to stock broker as he won’t have document regarding the remaining share that he had buyback quantity of 5 shares.

OP doesnt have to do anything. 3 mentioned is guarantee for units held. If more, are allotted its because of less participation. Either way, tax is paid by TCS.
I dont know why you are complicating it for no reason.

And what no document ? Depository statement will clearly show how many units were debited for buyback and equivalent amount ( ie. units x buyback price ) will be shown in bank a/c that rec’d the cash proceeds.