Section 115QA - Tax on distributed income to shareholders - Income-tax Act, 1961

1 [CHAPTER XII-DA SPECIAL PROVISIONS RELATING TO TAX ON DISTRIBUTED INCOME OF DOMESTIC COMPANY FOR BUY-BACK OF SHARES 115QA. Tax on distributed income to shareholders. - (1) Notwithstanding anything contained in any other provision of this Act, in addition to the income-tax chargeable in respect of the total income of a domestic company for any assessment year, any amount of distributed income by the company on buy-back of shares 4 [****] from a shareholder shall be charged to tax and such company shall be liable to pay additional income-tax at the rate of twenty per cent on the distributed income. 5 [Provided that the provisions of this sub-section shall not apply to such buy-back of shares (being the shares listed on a recognised stock exchange), in respect of which public announcement has been made before 5th day of July, 2019 in accordance with the provisions 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) ] 6 [Provided further that the provisions of this sub-section shall not apply in respect of any buy-back of shares, that takes place on or after the 1st day of October, 2024. ] Explanation .-For the purposes of this section,- (i) buy-back means purchase by a company of its own shares in accordance with the provisions of 2 [any law for the time being in force relating to companies]; (ii) distributed income means the consideration paid by the company on buy-back of shares as reduced by 3 [the amount, which was received by the company for issue of such shares, determined in the manner as may be prescribed ]. (2) Notwithstanding that no income-tax is payable by a domestic company on its total income computed in accordance with the provisions of this Act, the tax on the distributed income under sub-section (1) shall be payable by such company. (3) The principal officer of the domestic company and the company shall be liable to pay the tax to the credit of the Central Government within fourteen days from the date of payment of any consideration to the shareholder on buy-back of shares referred to in sub-section (1). (4) The tax on the distributed income by the company shall be treated as the final payment of tax in respect of the said income and no further credit therefor shall be claimed by the company or by any other person in respect of the amount of tax so paid. (5) No deduction under any other provision of this Act shall be allowed to the company or a shareholder in respect of the income which has been charged to tax under sub-section (1) or the tax thereon.] **************************** Notes: 1. Inserted vide the Finance Act with effect from the 1st day of June, 2013 2. Substituted vide THE FINANCE ACT, 2016 w.e.f. 1st day of June, 2016 , before it was read aS, section 77A of the Companies Act, 1956 (1 of 1956) 3. Substituted vide THE FINANCE ACT, 2016 w.e.f. 1st day of June, 2016 , before it was read aS, the amount which was received by the company for issue of such shares 4. Omitted vide FINANCE (NO. 2) ACT, 2019 w.e.f. 05-07-2019 before it was read as (not being shares listed on a recognised stock exchange) 5. Inserted vide Taxation Laws (Amendment) Act, 2019 w.e.f. 05-07-2019 6. Inserted vide Section 39 of the Finance (No. 2) Act, 2024 dated 16-08-2024 w.e.f. 01-10-2024