Until now, such provisions were applicable only to unlisted companies.
The measure has been introduced by the government to curb the misuse of the buyback route by listed entities to avoid taxes.
The central government had introduced tax on dividends in
2007 and increased the levy in 2016 when it introduced additional
dividend tax (ADT), which was applicable on investors who received
dividends over ₹10 lakh.
This prompted several companies to reduce their
dividend payouts and instead go for share repurchases.
The total
buybacks increased from ₹1,834 crore in 2015-16 to ₹55,587 crore in 2018-19.
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