07 Sep 2026
Budget tax tweaks to revive buyback momentum of cash-rich IT large caps
06 Feb 2026
06 Feb 2026
This is a link-enhanced version of an article that first appeared in the Economic Times
Article Overview:
The article notes that Budget 2026’s shift to taxing share buybacks purely as capital gains is expected to revive buyback activity among cash rich IT large caps, reversing the dampening effect of the 2024 tax changes.
Our Partner, Aditi Goyal, Tax, shared her perspective. Here’s what she had to say:
“It is expected that IT firms will continue with buybacks as a tool to return capital because it would allow them to return cash without triggering heavy tax burdens for most (particularly retail) shareholders.”
She further added, “IT firms often have limited high-return domestic investment opportunities relative to their accumulated cash….this may lead to companies considering approaches such as special dividends, or a hybrid approach of combining dividends with selective buybacks.”
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