Buyback Tax Rule Change: Wipro May Be First IT Major To Act After 1 April 2026

A major change to India’s buyback taxation will take effect on 1 April 2026. This shift is expected to spark a new wave of payouts from big IT companies. Among them, Wipro is widely seen as the most likely to take the first step.

Until now, buybacks were taxed as dividend income in the hands of investors. For those in the highest tax slab, this meant paying up to 35%. Under the new system, buybacks will be taxed as capital gains at 12.5%, along with a 12% surcharge.

What May Have Forced The Government To Change Tax Rules?

Buybacks had almost disappeared last year. Only a handful of companies announced such plans in 2025, far lower than the previous year. Frequent changes in tax rules made companies cautious. Many preferred dividends over buybacks due to better taxation. Data showed that the number of buybacks dropped by 79% in 2025.

Now, with a clearer structure in place, companies may look at buybacks again. Major IT firms like Tata Consultancy Services, Infosys, and Wipro have used this route several times in the past.

Why Wipro Could Move First?

Among large IT firms, Wipro is seen as the most likely to be the first company to consider a buyback after 1 April 2026. The company has a history of rewarding shareholders. It boasts one of the highest payout ratios in the sector. Its last buyback was in mid-2023.

Another key reason behind this anticipation is the large cash pile Wipro holds. The company alone is estimated to have over ₹57,000 crore in cash and equivalents. This gives it room to consider buybacks and provide payouts to shareholders. Strong cash flow, even in a weak demand cycle, supports such decisions.

Wipro shares have also not performed well in recent months. A buyback at this stage can help support investor sentiment. It may also signal management's confidence during a period of business transition.

Other players like HCLTech may also explore similar steps. However, some companies could wait and see how the market reacts before taking a call.

Also Read - Airline Refunds Get Faster, Cheaper As DGCA Cracks Down On Charges

Investors’ Takeaway

The next few months will be important. If one large IT company announces a buyback, others may follow. Much will depend on market conditions, investor response, and clarity on how the new tax rules play out in practice. For now, the change in taxation has opened the door again and Wipro may be the first company to take advantage of this opportunity.

Source:

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