Section 69 — Capital gains on purchase by company of its own shares or other specified securities
Old Act equivalent: Section 46A of IT Act 1961 Sub-part: E.—Capital gains
Statutory Text
(1) If a shareholder or a holder of other specified securities receives any consideration from any company for the purchase of its own shares or other specified securities held by such shareholder or holder of other specified securities, then, subject to the provisions of section 72, the difference between the cost of acquisition and the value of consideration so received shall be deemed to be the “Capital gains” arising to such shareholder or the holder of other specified securities, as the case may be, in the year in which the company purchases the shares or other specified securities. 10[(2) In respect of capital gains referred to in sub-section (1), where a company purchases its own shares or other specified securities in accordance with the provisions of section 68 of the Companies Act, 2013 (18 of 2013) and the shareholder or holder of other specified securities is a promoter, the aggregate income-tax payable on such capital gains shall be— (a) the income-tax payable on such capital gains in accordance with the provisions of this Act; and (b) an additional income-tax in respect of capital gains specified in column B domestic company domestic company 1. Short-term capital gains referred 2% 10% to in section 196 arising from the transfer of such securities. 2. Long-term capital gains referred 9.5% 17.5% to in section 197 or section 198 arising from the transfer of such securities. (3) For the purposes of this section,— (a) in the case of a company whose shares are listed on a recognised stock exchange in India, ‘promoter’ shall have the same meaning as assigned to it in regulation 2(k) of the Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 2018 made under the Securities and Exchange Board of India Act, 1992 (15 of 1992); (b) in any other case, “promoter” means,–– (i) a “promoter” as defined in section 2(69) of the Companies Act, 2013 (18 of 2013); or (ii) a person who holds, directly or indirectly, more than 10% of the shareholding in the company; 10. Substituted by the Finance Act, 2026, w.e.f. 1-4-2026. Prior to their substitution, sub-sections (2) and (3) read as under : ‘(2) If the shareholder receives any consideration of the nature referred to in section 2(40)(f), from any company in respect of buy-back of shares, then for the purposes of this section, the value of such consideration shall be deemed to be nil. (3) For the purposes of this section, “specified securities” shall have the same meaning as assigned to it in Explanation 1 to section 68 of the Companies Act, 2013 (18 of 2013).’ (c) “specified securities” shall have the same meaning as assigned to it in Explanation 1 to section 68 of the Companies Act, 2013 (18 of 2013).] Transactions not regarded as transfer.
Sub-sections
Sub-section (1)
If a shareholder or a holder of other specified securities receives any consideration from any company for the purchase of its own shares or other specified securities held by such shareholder or holder of other specified securities, then, subject to the provisions of section 72, the difference between the cost of acquisition and the value of consideration so received shall be deemed to be the “Capital gains” arising to such shareholder or the holder of other specified securities, as the case may be, in the year in which the company purchases the shares or other specified securities. 10[(2) In respect of capital gains referred to in sub-section (1), where a company purchases its own shares or other specified securities in accordance with the provisions of section 68 of the Companies Act, 2013 (18 of 2013) and the shareholder or holder of other specified securities is a promoter, the aggregate income-tax payable on such capital gains shall be— (a) the income-tax payable on such capital gains in accordance with the provisions of this Act; and (b) an additional income-tax in respect of capital gains specified in column B domestic company domestic company 1. Short-term capital gains referred 2% 10% to in section 196 arising from the transfer of such securities. 2. Long-term capital gains referred 9.5% 17.5% to in section 197 or section 198 arising from the transfer of such securities.
Sub-section (3)
For the purposes of this section,— (a) in the case of a company whose shares are listed on a recognised stock exchange in India, ‘promoter’ shall have the same meaning as assigned to it in regulation 2(k) of the Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 2018 made under the Securities and Exchange Board of India Act, 1992 (15 of 1992); (b) in any other case, “promoter” means,–– (i) a “promoter” as defined in section 2(69) of the Companies Act, 2013 (18 of 2013); or (ii) a person who holds, directly or indirectly, more than 10% of the shareholding in the company; 10. Substituted by the Finance Act, 2026, w.e.f. 1-4-2026. Prior to their substitution, sub-sections
Sub-section (2)
and (3) read as under : ‘(2) If the shareholder receives any consideration of the nature referred to in section 2(40)(f), from any company in respect of buy-back of shares, then for the purposes of this section, the value of such consideration shall be deemed to be nil.
Sub-section (3)
For the purposes of this section, “specified securities” shall have the same meaning as assigned to it in Explanation 1 to section 68 of the Companies Act, 2013 (18 of 2013).’ (c) “specified securities” shall have the same meaning as assigned to it in Explanation 1 to section 68 of the Companies Act, 2013 (18 of 2013).] Transactions not regarded as transfer.
Provisos
None.
Explanations
None.
Tables
Table 1:
of the Table below, computed at the rate specified in column C or column
Table 2:
D of the said Table:
Table 3:
TABLE
Table 4:
Sl. Income Rate, where the Rate, where the proNo. promoter is a moter is other than a
Table 5:
A B C D
Key Structure
- Applies to: Shareholders and holders of other specified securities receiving consideration from a company for buy-back of its own shares or specified securities; additional income-tax applies specifically where the shareholder or holder is a promoter.
- Asset type: Shares or other specified securities of a company purchased by the company itself under section 68 of the Companies Act, 2013.
- Conditions: The company must purchase its own shares or other specified securities; capital gains equal the difference between the consideration received and the cost of acquisition, subject to section 72; where the holder is a promoter, additional income-tax is levied at specified rates depending on whether the promoter is a domestic company or other than a domestic company.
- Time limits: None specified in this section.
- Monetary limits: Additional income-tax rates for promoters: short-term capital gains (section 196) at 2% (domestic company promoter) or 10% (other promoter); long-term capital gains (section 197 or 198) at 9.5% (domestic company promoter) or 17.5% (other promoter).
- Exceptions: The additional income-tax under sub-section (2) applies only to promoters; for listed companies, “promoter” is defined per SEBI (Buy-Back of Securities) Regulations, 2018; for unlisted companies, it includes promoters under section 2(69) of the Companies Act, 2013 or persons holding more than 10% shareholding directly or indirectly. Prior to Finance Act, 2026 substitution, consideration of the nature referred to in section 2(40)(f) was deemed nil.
Cross-References
- s072-computation — section 72 governs computation of capital gains; the difference between cost of acquisition and consideration is subject to section 72.
- Section 196 (not yet ingested) — short-term capital gains rate referenced in the additional income-tax table for promoters.
- Section 197 (not yet ingested) — long-term capital gains rate referenced in the additional income-tax table for promoters.
- Section 198 (not yet ingested) — long-term capital gains rate referenced in the additional income-tax table for promoters.
- Section 68 of the Companies Act, 2013 (external) — governs the buy-back of shares procedure.
- Section 2(69) of the Companies Act, 2013 (external) — defines “promoter” for unlisted companies.
- Section 2(40)(f) (not yet ingested) — definition of deemed dividend; referenced in the pre-amendment version of sub-section (2).
Amendment Notes
None noted from the extracted pages.