Taxation of shareholder on buyback of shares

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 January 2013 what is the tax impact on a shareholder incase of buyback of shares. is dividend more beneficial or buyback of shares.

Thank you in advance.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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02 January 2013 In case of buyback of shares, the shareholder transfer's the shares to the company and the transaction results into capital gains.
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Dividend is received out of the profits of the company. Whereas I have explained about the buy back , in the previous para.
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It has to be judged by yourself, by applying the monetary senses, whether to get a calf from a cow, every year is better than selling the cow itself.
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