It is proposed to provide that consideration... ... Union Budget 2026-27: LIVE

It is proposed to provide that consideration received by a shareholder on buy-back shall be chargeable to tax under the head “Capital Gains” instead of being treated as dividend income.

In the interest of minority share holders, she proposes to tax buy back for all types of shareholders as capital gains. However, to disincentivise misuse of tax arbitrage, promoters will pay an additional buy back tax. This will make effective tax 22% for corporate promoters, while for non-corporate promoters, the tax will account for 30%. 

TCS rates for sellers of specific goods namely, alcoholic liquor, scrap and minerals will be rationalised to 2%. On tendu leaves , tax will be reduced from 5% to 2%.