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Infosys Buyback:
The entire amount received in buyback is taxed as deemed dividend (Income from Other Sources) at slab rates; your share’s cost becomes a capital loss that can be set off/carry-forward. Overall tax outgo is usually higher than capital gains tax. Record date & tender window: To be announced. Article updated when company publishes dates.
Price, Dates & Deemed Dividend Tax Explained
Corporate Action | ProStocks Client Communication | Last updated: 16 Sep 2025
Key Buyback Details
| Company | Infosys Limited |
|---|---|
| Buyback Size | ₹18,000 crore |
| Buyback Price | ₹1,800 per share |
| Maximum Shares | 10,00,00,000 equity shares (≈2.41% of paid-up equity) |
| Route | Tender offer (proportionate acceptance; unaccepted shares remain in demat) |
| Record Date | To be announced |
| Tendering Start | To be announced |
| Tendering End | To be announced |
| Status | Board approved on 11 Sep 2025; detailed timelines pending. |
Tax Treatment (Deemed Dividend)
- Entire proceeds taxed as dividend: The full amount you receive in the buyback (₹1,800 per accepted share) is taxed as deemed dividend under the head Income from Other Sources, at your applicable slab rate.
- Cost of acquisition becomes capital loss: Your original purchase cost of the accepted shares is treated as a capital loss. You may set it off against existing capital gains or carry it forward as per the Act.
- TDS on payout: The company deducts tax at source on the gross payout (typically 10% for residents; for non-residents generally 20% + surcharge + cess, subject to DTAA relief). The exact TDS shown in your contract note/payout advice should be used while filing the return.
- Slab-rate example (for illustration):
- If 100 shares are accepted → Proceeds = 100 × ₹1,800 = ₹1,80,000.
- This ₹1,80,000 is added to your total income and taxed per slab:
Slab Rate Tax on ₹1,80,000 10% ₹18,000 20% ₹36,000 30% ₹54,000
- Return filing — what to do:
- Report buyback proceeds under Income from Other Sources.
- Claim the TDS shown by the company against your final tax liability.
- If your slab tax exceeds TDS, pay the balance; if TDS exceeds liability, claim a refund.
- Report the capital loss (your cost of acquisition) for set-off/carry-forward as permitted.
- Important: Deemed dividend taxation typically results in a higher effective tax than normal capital gains (15% STCG / 20% LTCG with indexation). Compare post-tax outcomes before deciding to tender.
This is a general educational summary; please consult your tax advisor for personalised guidance.
Should You Tender?
Pros: Fixed ₹1,800 price (often at a premium); proportionate acceptance; unaccepted shares remain with you.
Caution: Since the entire proceeds are taxed as deemed dividend at slab rates, your post-tax benefit may be lower than selling on NSE/BSE where capital gains tax applies.
Wait for the Record Date and Tender Window announcement. Re-check acceptance ratios and compute post-tax outcomes before taking a call.
© ProStocks. Infosys buyback details as per company disclosure (11 Sep 2025). Dates pending announcement. This blog is for educational purposes only and is not investment advice.
