Buy Back of Shares

Upto my understanding:- 

77(C) the buy-back is or less than twenty-five per cent of the total paid-up capital and free reserves of the company: - [This is regarding total fund it can apply for Buy Back in any F.Y.] {In your case you can use maximum Rs. 5,00,000/- in a F.Y.}                                                                                                              

Provided that the buy-back of equity shares in any financial year shall not exceed twenty-five per cent of its total paid-up equity capital in that financial year;- [This is clearly stating maximum ceiling on buy back of equity shares in a F.Y.] {In your case you can buy back maximum 25,000 equity share in a F.Y.}

But, wait for the expert's comment.

Regards,

THIS REPLY IS NOT FRM ME BT MY FRIEND JAGRUTI (CS) U CAN ALSO VISIT HER PROFILESubject : hi Message : 25 % is on Amount of buy Back of equity shares & not on no. of equity shares.
As per Section 77A (2)(c), in case of buy back of equity shares it should not exceed 25% of total paid up EQUITY capital. Which in ur case is 250000 (25 % of 1000000 equity capital) Hence first option of 10000 shares @ 25 each is correct. From : Jagruti (CS)