Income Tax Department Clarifies 12% Surcharge on Promoters Buyback Gains

The Income Tax Department has issued a clarification on its official social media platform ‘X’ (formerly Twitter) regarding the 12% surcharge on promoters in case of share buybacks.

The department said that a recent amendment introduced through the Government’s changes to the Finance Bill, 2026, provides for a 12% surcharge on the additional income tax payable by promoters. This tax applies to capital gains earned by promoters from share buybacks carried out under Section 68 of the Companies Act, 2013.

According to the clarification, Section 69 of the Income-tax Act, 2025, deals specifically with the tax rates applicable to the additional income tax payable by promoters on such capital gains.

The department made it clear that the 12% surcharge will apply only to the additional income tax payable by promoters on capital gains arising from buybacks, as mentioned under Section 69 of the Income-tax Act, 2025.

For non-promoters, however, the normal surcharge rates will continue to apply on capital gains from buybacks, wherever applicable.

The department made this clarification to remove confusion about the applicability of the newly introduced 12% surcharge provision.