The Finance Bill, 2026, which was passed by the Lok Sabha on Wednesday, has proposed a flat 12% surcharge on income from share buybacks, resulting in a higher effective tax rate for those with up to Rs 1 crore taxable income. The Bill seeks to overhaul buyback taxation by shifting the tax burden to shareholders and treating proceeds as capital gains under Section 69 of the Income-tax Act, 2025. But it is the move towards a uniform surcharge—irrespective of income slabs—that is drawing the most attention.