Effective or announced 1 April 2026Impact for foreign investors: high
What changed
From 1 April 2026 the Income-tax Act 2025 replaced the 1961 Act, with new section numbers (for example s.200 for the concessional regime and s.206 for MAT). Buy-backs are taxed as capital gains in the shareholder’s hands, not as dividends. Promoters pay an additional tax that takes gains to 22% (Indian-company promoter) or 30% (any other promoter, including a foreign parent), before surcharge and cess.
Who it affects
All taxpayers, and in particular foreign parents planning to repatriate cash through buy-backs.
What to do
Update tax references in contracts and policies to the new sections, and re-run repatriation models comparing dividends and buy-backs.