The 2024 budget introduced significant changes to the taxation of share buybacks and securities transaction tax (STT) on futures and options (F&O) transactions.
Income from the buyback of shares by companies will now be chargeable in the hands of the recipient investor as a dividend, replacing the current regime where additional income tax is levied on the company. Additionally, the cost of such shares will be treated as a capital loss for the investor.
The rates of STT on the sale of options in securities will be increased from 0.0625% to 0.1% of the option premium. Similarly, the STT on the sale of futures in securities will rise from 0.0125% to 0.02% of the trade price.
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