Section 69 — Capital gains on purchase by company of its own shares or other specified securities

(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 securi -
ties, 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 pur-
chases 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 pro-
visions of this Act; and
( b) an additional income-tax in respect of capital gains specified in column B
of the Table below, computed at the rate specified in column C or column
D of the said Table:
TABLE
Sl.
No.
Income Rate, where the
promoter is a
domestic company
Rate, where the pro-
moter is other than a
domestic company
A B C D
1. Short-term capital gains referred
to in section 196 arising from the
transfer of such securities.
2% 10%
2. Long-term capital gains referred
to in section 197 or section 198
arising from the transfer of such
securities.
9.5% 17.5%
(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).]