Infosys Limited has announced a major share buyback for 2025, and it has immediately drawn attention because of its large size and the tax implications attached to it. The company plans to buy back shares worth ₹18,000 crore at a fixed price of ₹1,800 per share. The record date for eligibility has been set as 14 November 2025, and the tendering window will remain open from 20 November to 26 November 2025. Infosys aims to buy back up to 10 crore shares, making this one of the biggest corporate actions of the year.
This buyback has become particularly important because of the new tax rules that came into effect after 1 October 2024. These rules have changed how buybacks are taxed in India, shifting the tax burden from the company to the shareholder. Understanding these rules is crucial for anyone holding Infosys shares and planning to participate in the tender offer.
Infosys has used the buyback route several times in previous years to return surplus cash to shareholders. However, the 2025 buyback is among its largest. By offering ₹1,800 per share, Infosys is giving shareholders a clear exit price during the buyback window. This fixed price is often higher than the market price, which encourages participation.
When the company opened the buyback window in November 2025, the stock price showed limited movement. The muted reaction suggested that the market had already absorbed the buyback news when the announcement was first made. Even with a calm price reaction, many shareholders view the tender offer as a chance to unlock value, especially if their purchase price is significantly lower than ₹1,800.
A major change in the Indian tax system has made this buyback different from earlier years. Before October 2024, India had a special “buyback tax” under Section 115QA. Under that system, the company paid tax at the time of buying back its shares, and shareholders received the buyback amount without any additional tax burden.
That rule no longer applies to buybacks conducted after 1 October 2024. The company-level buyback tax has been removed, and the tax responsibility has shifted to shareholders. Under the new law, the money received from the buyback is treated as a “deemed dividend”, and it becomes taxable in the hands of the shareholder.
This means that the amount received from the Infosys buyback may have to be declared as Income from Other Sources in the income-tax return. The timing of the buyback and the new tax system make it essential for shareholders to understand how the income must be reported.
Another major area of confusion involves capital gains. Earlier, shareholders paid capital-gains tax on buyback proceeds, but the system changed when the company buyback tax was introduced years ago. Now that the company tax has been removed, capital-gains rules are once again relevant, but with new conditions.
Under the new framework, the entire buyback amount may be classified as deemed dividend. Because of this, capital-gains reporting becomes a technical exercise. For many taxpayers, the shares tendered in the buyback must still be shown in the capital-gains schedule, but the sale consideration might be considered zero, allowing the cost of acquisition to be carried forward as a loss. The rules depend on the type of investor and the category of income involved.
This creates a situation where a shareholder must report the buyback proceeds as income while also making the correct disclosure in the capital-gains section of the tax return. Proper reporting becomes essential to avoid mistakes that may lead to tax notices in the future.
The amount of tax payable depends largely on the type of shareholder. Resident individuals are taxed according to their income tax slab. Since the buyback proceeds are treated as deemed dividend, the tax rate for individuals can vary from the basic slab rate to the highest marginal slab.
For non-resident shareholders, including foreign investors, the tax treatment depends on the Double Taxation Avoidance Agreement applicable to the shareholder’s home country. In many cases, withholding tax may be applied by the company when paying out the buyback amount. The final tax liability must then be calculated based on treaty benefits and residency rules.
Mutual funds and certain institutional investors may receive different tax treatments depending on the category of the fund and whether the income is exempt under relevant sections. Each class of investor must carefully examine the applicable tax rules.
Documentation plays a central role in complying with the tax rules for this buyback. Shareholders must preserve the company’s public announcement, the letter of offer, proof of tendering shares, and the acceptance report issued after the buyback closes. If the company deducts tax at source, a TDS certificate will also be required to support the income declared in the tax return.
At the time of filing the income-tax return, the amount received must be shown under the correct category, and any capital-loss entry must be recorded according to the tax department’s updated guidance. Errors in classification can lead to mismatches with the company’s filings, which may result in scrutiny or notices.
Deciding whether to participate in the Infosys buyback depends on several factors. Some shareholders may prefer the guaranteed price of ₹1,800, especially if the market price stays lower. Long-term investors may compare the tax impact of the buyback with the future potential of the stock. Since the buyback introduces deemed-dividend taxation, some investors may find the tax outcome less advantageous than selling shares on the open market, depending on their individual situation.
At the same time, shareholders seeking liquidity or certainty of returns may find the buyback attractive despite the tax burden. The large size of the buyback and the fixed tender price make it a significant event in the Indian market, influencing both short-term trading behaviour and long-term investment decisions.
The Infosys buyback at ₹1,800 per share, worth ₹18,000 crore and covering up to 10 crore shares, is one of the most important corporate actions of 2025. The shift to the new post-October-2024 tax regime has changed how buybacks are taxed and reported. The proceeds are now treated as deemed dividend, and shareholders must report the amount as income while handling capital-gains schedules carefully.
Thorough documentation, accurate reporting, and clear understanding of the applicable tax rules are essential for smooth compliance. With these new obligations, the 2025 Infosys buyback marks a major shift in how Indian shareholders must approach such corporate events under the updated tax system.