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Informist, Sunday, Feb. 1, 2026

--BUDGET: To tax buyback of shares as capital gains

--BUDGET: Promoters to pay extra buyback tax

--BUDGET: Promoters to pay additional tax on share buybacks

--BUDGET: To raise STT on futures to 0.05%

--BUDGET: STT on options premium, trading to 0.15% from 0.1%

MUMBAI – The Union Budget for 2026-27 (Apr-Mar) raised the Securities Transaction Tax on futures transactions to 0.05% from 0.02% and that on options premium and exercise of options to 0.15% each from 0.1% and 0.125%, respectively. 

Finance Minister Sitharaman also proposed to tax buybacks for all types of shareholders as capital gains. The long-term capital gains tax rate in India is 12.5% and the short-term capital gains tax rate is 20%.

Sitharaman proposed an additional tax on buybacks for promotors to "disincentivize misuse of tax arbitrage". "This will make effective tax 22 percent for corporate promoters. For non-corporate promoters the effective tax will be 30 percent," Sitharaman said in her speech while presenting the Union Budget for 2026-27 (Apr-Mar).  End

Reported by Anshul Choudhary

Edited by Pankaj Aher

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