New Delhi, Feb. 1 -- In a throwback to an earlier time, gains from buybacks will be treated as capital gains from the next fiscal year for all investors, effectively reducing the tax outgo for several shareholders.

While that's great news for non-promoter shareholders, promoter shareholders will have to pay a differentiated buyback tax that is higher than the capital gains, limiting the benefit they get from the move announced in the Union budget for FY27 on Sunday.

In her budget speech, finance minister Nirmala Sitharaman announced that gains from buybacks for shareholders will be taxed as capital gains at their usual rates-12.5% for long-term, and 20% for short-term. For context, gains booked before 12 months are short term whereas th...