In November 2022, the Securities and Exchange Board of India (‘SEBI’) undertook a comprehensive review of the regulatory regime relating to buybacks or stock repurchases through the Consultation Paper on Review of SEBI (Buyback of Securities) Regulations, 2018. For the most part, SEBI was quite clear about what it envisions for India’s buyback regime. However, one aspect that lacked clarity was the approach India would take towards the taxation of buybacks. SEBI recognised the problem that exists in the Indian regime wherein the company itself has to bear the tax burden for exiting shareholders. To address this issue, SEBI argued that it was ‘desirable’ to ‘realign’ the regime and tailor it to shift the tax burden on existing shareholders. Ultimately, SEBI left the decision to the Ministry of Finance. Surprisingly, the 2023 Budget did not account for SEBI’s discussion at all and neither did the Finance Act, 2023. This paper undertakes a detailed analysis of the buyback taxation regime in India and examines its lacunae. It does so by examining the traditional rationale behind the buyback of shares, comparing the taxation of buybacks with dividends and undertaking a comparative jurisdictional analysis with respect to the policy surrounding buybacks. Ultimately, this paper proposes a course of action for the Ministry of Finance to ensure that neither buybacks nor dividends are preferred for tax reasons. It concludes by proposing certain amendments to the Income Tax, 1961. The proposed amendments have their edifice in an idea put forward in 1967 – the economic equivalence of buybacks and dividends.