Sebi Proposes Revived Path for Share Buybacks via Stock Exchanges
Sebi suggests reintroducing open market share buybacks through stock exchanges, a method halted in 2025 over fairness and tax concerns. Changes in taxation have addressed these issues, allowing public shareholders to be taxed as capital gains. Sebi is inviting public comment on the proposal until April 23.
- Country:
- India
The Securities and Exchange Board of India (Sebi) has proposed bringing back the buyback of shares from the open market via stock exchanges. The method had been discontinued in 2025 due to concerns about shareholder equity and tax implications.
According to Sebi's consultation paper, this reintroduction provides an alternative mechanism for buybacks while ensuring fair taxation for public shareholders. The previous system resulted in some shareholders disproportionately benefiting from buybacks.
Amendments via the Finance Act, 2026, have now addressed prior tax disparities, taxing buyback proceeds as capital gains. Industry bodies like FICCI have welcomed the move, highlighting its potential to stabilize markets and boost investor confidence.
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