India’s second largest IT company has announced a buyback program of Rs 18,000 crore. This is Infosys’s largest buyback program ever. Under this, the company will buy 10 crore shares from investors. For this, the company has fixed a price of Rs 1,800 per share.
Record date not announced yet
The company has not yet announced a record date for the share buyback program. The company will also announce the opening and closing date for tender tender. On September 12, Infosys shares climbed 0.95 per cent to close at Rs 1,524.10. This means that if you tender your share in buyback, then you will get an advantage of around Rs 275 per share. Infosys’s stock slipped 19 per cent this year and more than 21 per cent in the last one year. In view of this, the price of buyback looks attractive.
Los lifting investors can tender share
Investors who are trapped in Infosys shares can tender their share in buyback. But, before doing so, it would be good to calculate tax on their profits. Prior to October 1, 2024, the company was responsible for paying tax on buyback. However, the government changed this rule in Union Budget 2024. After October 1, 2024, the investors will be responsible for paying tax on tender tender in buyback. Buyback profits will be considered dividend. It will come under Taxpayers’ Income from Other Sources.
Investors will have to pay tax on profit
Experts say that if you tenders share in Infosys’s buyback program, then you will have to pay tax on the profits from it. If you fall into 20 percent tax slab, then 20 percent tax on profits of Rs 275 means that you will have to pay Rs 55 per share. It is important to keep in mind that the Investors cannot deduct the Cost of Acquisition if the shares are tendered in the buyback.
Profit shares will depend on further moves
However, the nuclear capital loss is allowed. The ‘consolidation’ found for the calculation of the capital gence is considered to be a nil. This means that the cost you have paid for those shares is considered a loss under the Capital Gains Head. It can be set-off with another capital gains. It can be carried forward for the next 8 assessment year. Experts say that the advantage of tendering Infosys shares into buyback will depend on how the move of the shares is further.