Tax on Buyback 2025

Shareholder Portal

As per the Income-tax Act, 1961, (“the IT Act”) as amended by the Finance (No. 2) Act, 2024, the entire consideration paid by company to its shareholders on buyback of shares shall be considered as dividend with effect from October 01, 2024. In this regard, clause (f) has been inserted in section 2(22) of the IT Act, which provides that “dividend” includes any payment by a company on purchase of its own shares from a shareholder in accordance with the provisions of section 68 of the Companies Act, 2013. Hence any consideration paid to shareholders on account of a buyback of shares is taxable in the hands of the shareholders as dividend income.

Section 46A of the Income Tax Act,1961 which provides for capital gains taxation in the hands of the shareholders upon buy-back of shares by the company is amended with effect from October 01, 2024 which states that in the case of buy-back of shares, the consideration received by the shareholder will be deemed to be Nil for the purpose of computing capital gains. Consequently, a capital loss will arise in the hands of the shareholder equivalent to the cost of acquisition of the shares bought back.

The Board of Directors of the Company, in its meeting held on September 11, 2025, has, subject to the approval of the members of the Company, by way of a special resolution through Postal Ballot (“Special Resolution”) approved the proposal to Buyback its own fully paid-up equity shares from the shareholders of the Company, as on the record date, November 14, 2025, on a proportionate basis, at a price of Rs. 1,800 per Equity Share.

Since the Buyback is more than 10% of the total paid-up equity capital and free reserves of the Company, the Board had sought approval of the shareholders of the Company for Buyback, by a special resolution, through notice of postal ballot dated September 25, 2025 (“Postal Ballot Notice”), the results of which were announced on November 6, 2025. The shareholders of the Company have approved the Buyback through the Special Resolution.

The Company shall be required to deduct tax at source (TDS) or withholding taxes (WHT) at the time of making payment of total buyback consideration to shareholders.

The residential status of the shareholders would be taken as per the information available with the depositories (NSDL/CDSL) or the Registrar and Share Transfer Agent (KFin Technologies Limited) as on Record Date for the Buyback. Shareholders holding shares in dematerialized mode are requested to update their records such as tax residential status, PAN, registered email addresses, mobile numbers and other details with their relevant depositories through their depository participants. Shareholders holding shares in physical mode are requested to furnish details with the Company’s registrar and share transfer agent, KFin Technologies Limited.

To enable the Company to determine the applicable rate of tax deduction, it is essential for shareholders to submit the relevant information and declarations. The applicable tax forms for Resident and Non-Resident shareholders can be accessed through the hyperlinks provided below:

• Resident Shareholders
• Non-resident shareholders

Tax Deduction at Source / Withholding of Taxes

For resident shareholders, taxes shall be deducted at source under Section 194 of the IT Act as follows:

* As per Section 139AA of the IT Act, every individual person who has been allotted a PAN and who is eligible to obtain Aadhaar, shall be required to link the PAN with Aadhaar. In case of failure to comply with this, the PAN allotted shall be deemed to be invalid / inoperative and he shall be liable to all consequences under the IT Act and tax shall be deducted at the higher rates as provided in section 206AA of the IT Act, 1961 i.e., 20% of tax deduction at source.

However, no tax shall be deducted to resident individual shareholders if the aggregate of all dividends and buyback consideration as dividend to be received by them during financial year 2025-2026 does not exceed in aggregate ₹10,000.

Further no tax shall be deducted in cases where individual shareholder provide Form 15G / Form 15H (Form 15G is applicable to resident individual shareholders and Form 15H is applicable to resident individual shareholders aged 60 years or more), subject to conditions specified in the IT Act. If during the financial year 2025-2026 above mentioned Forms become invalid, then tax would be deducted on total payments made during the financial year 2025-26 from the buyback consideration. Permanent Account Number (PAN) is mandatory for shareholders providing Form 15G / 15H or any other document as mentioned above.

Resident shareholders may also submit declarations or documents specifying the provisions of IT Act to claim a lower / nil tax deducted at source. Shareholders may also provide a Lower Tax Deduction Certificate (LTDC) certificate issued by the Income Tax Department under Section 197 or any other section of the IT Act, which authorizes the company to deduct TDS at a lower rate instead of the standard prescribed rate under IT Act.

For non-resident shareholders, income tax is required to be withheld (WHT) from consideration of buyback in accordance with the provisions of Section 195 or Section 196D or any other applicable sections of the Income Tax Act, 1961 as dividend. The withholding tax shall be at the rate of 20% (plus applicable surcharge and cess) or as notified by the GOI.

Non- resident shareholders may also provide a Lower Tax Deduction Certificate (LTDC) certificate issued by the Income Tax Department under Section 195 or any other section of the IT Act, which authorizes the company to deduct WHT at a lower rate instead of the standard prescribed rate under IT Act.

However, as per Section 90 of the IT Act, non-resident shareholders can avail the provisions of certain Double Tax Avoidance Agreement (DTAA) provided they satisfy conditions such as non-applicability of the General Anti-Avoidance Rule (“GAAR”), read with Multilateral Instrument (MLI), between India and the country of tax residence of the shareholders, if such DTAA has beneficial provisions with respect to buyback consideration which are considered payable as dividend and shareholders fulfill all requirements of DTAA. For this purpose i.e., to avail benefits under the DTAA read with MLI, non-resident shareholders will have to provide all the following documents:

• Copy of the PAN card allotted by the Indian income tax authorities duly attested by the shareholders or details as prescribed under rule 37BC of the Income-tax Rules, 1962 in absence of PAN Card.
• Copy of the Tax Residency Certificate for financial year 2025-26 obtained from the revenue or tax authorities of the country of tax residence, duly attested by shareholders / authorized signatory
• Electronic Form 10F as per notification no. 03/2022 dated July 16, 2022 issued by the Central Board of Direct Tax Notification can be read under -notification-no-3-2022-systems.pdf (incometaxindia.gov.in)}. Form 10F has to be obtained electronically through the e-filing portal of the Indian income tax website at https://www.incometax.gov.in/iec/foportal.
• Self-declaration by the shareholders of having no permanent establishment in India in accordance with the applicable tax treaty and IT Act.
• Self-declaration of beneficial ownership of equity shares by the non-resident shareholder.
• Self-declaration of fulfilling all conditions of tax treaty for been eligible to claim benefit of the tax treaty (DTAA) read with Multilateral Instrument (MLI).
• Any other documents as prescribed under the IT Act for lower withholding of taxes, if applicable, duly attested by the shareholders

Kindly note that extending the benefit of tax treaty (DTAA) would depend on the documents submitted.

Company has released a notification in the newspaper providing information about the record date for dividend. The same is available here.

The Company has enabled a shareholder portal for shareholders to upload the relevant tax documents for purposes of tax deduction at source. No communication and documents would be accepted from members after last date of tendering of the offer i.e., November 26, 2025. Shareholders may write to buyback.tax@infosys.com for any clarifications on this subject. We request shareholders to kindly take note of it accordingly. In case of non-submission of any tax documents by the shareholders, tax deduction at source will be done at the standard prescribed rates under the Act.

Members are requested to visit https://www.infosys.com/investors/shareholder-services/buyback-2025.html for more instructions and information on this subject.

All documents with respect to the Buyback submitted by you on or before last date of tendering of the offer i.e., November 26, 2025 will be verified by us and we will consider the same while deducting the appropriate taxes, if they are in accordance with the provisions of the Act.

Click here to visit the shareholder portal.

The instructions and guidelines to access the shareholder portal are available here. Link for instructions and guidelines.

For the format of prescribed tax forms, click here.