Income Tax Act, 2025
Section 5: The Explanation omitted by Act 13 of 2018, s. 41 (w.e.f. 12018).
5. The Explanation omitted by Act 13 of 2018, s. 41 (w.e.f. 12018).
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1[CHAPTER XIIDA
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 buyback of shares (not being shares listed on a recognised stock exchange) 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.
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 subsection (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.
115QB. Interest payable for non-payment of tax by company.—Where the principal officer of the
domestic company and the company fails to pay the whole or any part of the tax on the distributed income
referred to in sub-section (1) of section 115QA, within the time allowed under sub-section (3) of that
section, he or it shall be liable to pay simple interest at the rate of one per cent for every month or part
thereof on the amount of such tax for the period beginning on the date immediately after the last date on
which such tax was payable and ending with the date on which the tax is actually paid.
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 buyback of shares (not being shares listed on a recognised stock exchange) 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.
Explanation.—For the purposes of this section,—
”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];
“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].
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 subsection
shall be payable by such company.
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
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.
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
or the tax
thereon.
115QB. Interest payable for non-payment of tax by company.—Where the principal officer of the
domestic company and the company fails to pay the whole or any part of the tax on the distributed income
referred to in sub-section
of section 115QA, within the time allowed under sub-section
of that
section, he or it shall be liable to pay simple interest at the rate of one per cent for every month or part
thereof on the amount of such tax for the period beginning on the date immediately after the last date on
which such tax was payable and ending with the date on which the tax is actually paid.