The government has issued a clarification regarding a key amendment introduced through the Finance Bill, 2026, specifying the applicability of a 12% surcharge on promoters earning capital gains from share buybacks.
According to the clarification, the amendment provides for a surcharge on the additional income tax payable by promoters on capital gains arising from buybacks undertaken in accordance with Section 68 of the Companies Act, 2013. The surcharge has been fixed at a rate of 12%.
The government further explained that the relevant provision under Section 69 of the Income-tax Act, 2025 deals specifically with the tax rates applicable to such additional income tax on promoters. As such, the 12% surcharge will be levied only on the additional income tax component payable by promoters on capital gains arising from buybacks, as outlined under Section 69(2)(b).
Importantly, the clarification draws a distinction between promoters and non-promoters. In the case of non-promoters, the surcharge will not be governed by this specific amendment. Instead, the existing surcharge provisions under normal tax rules will continue to apply, wherever applicable, on capital gains from buybacks.
The clarification aims to remove ambiguity around the scope and applicability of the surcharge provision, ensuring that the levy is confined strictly to the additional tax liability of promoters and does not extend beyond its intended framework.
