How to show buyback share income?

Regarding subtracting the ccost from the Short-Term Capital Gain (STCG) of the current financial year (FY), in many tax systems, the cost of acquisition and other related expenses are subtracted from the sale proceeds to determine the capital gain or loss. So, yes, you would typically subtract the cost to calculate the STCG. 

Buyback proceeds are now treated as capital gains in your hands from April 1, 2026. The dividend treatment under Section 115QA is gone.

For AY 2026-27, report buyback income in Schedule CG of ITR-2:
- If shares were listed on a recognised stock exchange: LTCG if held over 12 months (12.5% rate), STCG if 12 months or under (20% rate)
- If shares were unlisted: LTCG if held over 24 months (12.5% without indexation), STCG at slab rates

The acquisition cost of the original shares is your cost of acquisition. Selling price is the buyback amount.

One important distinction: the 12% additional tax on buybacks applies to PROMOTERS only (Section 115QA-equivalent for promoters under the new Act). If you are a minority shareholder or retail investor, you are taxed only on the capital gain at normal rates. There is no additional buyback tax on you.

For a full breakdown of the rates, promoter vs. non-promoter treatment, and how to fill Schedule CG, this [guide on buyback share taxation for 2026](taxgarden.in/blog/tax-on-buyback-of-shares-india-section-115qa-new-rules-2026) has the complete details.