Tax on buy back of shares

Section 115QA was introduced to plug the leakage of tax in unlisted companies thorugh the But back of shares in lieu of dividend. The method used by some companies were that the shares used to be bought back from individual shareholders as permitted by the companies act and then the same shareholders used to re invest the capital in the same company, thereby avoiding taxon distruted profits under 115O. Now even buy back of shares will be taxed at 20%