After April 2026, is a buyback or a secondary sale better for me as a founder?
Since 1 April 2026 the two can look alike on paper and land very differently. Both are now taxed as capital gains in your hands: the price you get minus your cost, long term once you have held unlisted shares for more than 24 months, and taxed at 12.5% then. The difference is the promoter rule. If you count as a promoter, and in an unlisted company that includes anyone holding more than 10% of the shares, a buyback carries an additional tax that lifts the effective rate on a long-term gain to about 30% for an individual, before surcharge and cess. Selling the same shares to an incoming investor in a secondary carries no such extra tax. So for a founder with a large stake, a secondary at the same price usually leaves more in hand, while a buyback can still suit a smaller holder or an employee. The company's cash and the board decide which is on offer, so model both with a CA before you agree.
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3 resources, 2 India-specific, 2 link-checked.
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A chartered accountant's walk-through of how a buyback of shares is taxed from 1 April 2026, including the additional tax on promoters and who counts as one.
The India reference on short vs long term capital gains, holding periods, and rates for equity, funds, and property, so you know the tax before you sell.
