21th Sep Prelims Sure Shot for UPSC IAS Exam


Concept of No Buy Back Tax

  • Finance Minister in her maiden Budget, proposed to levy a tax on buybacks by listed companies.
  • A buyback essentially is a scheme by which a company repurchases a certain amount of its outstanding shares. Once taken back, these shares are extinguished by the company.
  • A buyback is where a company buys back or repurchases the shares issued to shareholders. A dividend is a specified amount per share that is paid out to the shareholders.
  • A buyback offer, however, is optional. Only those shareholders who wish to receive money in lieu of their shares may tender their shares in a buyback.
  • Typically, companies distribute dividends or buy back shares from investors using their post-tax income
  • Dividend is taxed in India. To avoid this taxation, some companies do buy-back of their shares, which may or may not be after an issue of bonus shares a while back. This method saves the tax of investors, and robs the Government in a way.
  • To stop this leak, the Government has re-introduced the old Buy-back tax, to stop this leak, and essentially create revenue again.

Surcharge Corporate Tax

  • A corporate tax, also called corporation tax or company tax, is a direct tax imposed by a jurisdiction on the income or capital of corporations or analogous legal entities.
  • Surcharge basically means anything that is over and above the normal price or rates. A surcharge means an extra fee added onto another fee or charge.
  • The Finance Minister has proposed to slash the corporate tax rate for domestic companies and new domestic manufacturing companies.
  •  The corporate tax rate after surcharge will now be 25.17 percent inclusive of all cess and surcharges for domestic companies. The corporate tax rate has been brought down from 30 percent to 22 percent.

Corporate Social Responsibility Funds

  • CSR is a corporation’s initiatives to assess and take responsibility for the company’s effects on environmental and social wellbeing. The CSR law mandates that companies have to spend at least 2% of last 3 years average net profits on CSR activities.
  • The qualifying company will be required to constitute a CSR Committee consisting of 3 or more directors.
  • The CSR Committee shall formulate and recommend to the Board, a policy which indicates the activities to be undertaken, allocate resources and monitor the CSR Policy of the company.
  • If the company did not spend CSR, it has to disclose the reason for not spending. Non-disclosure or absence of the details will be penalised from Rs 50,000 to Rs 25 lakh or even imprisonment of up to 3 years.

Minimum Alternate Tax

  • Corporates needs to pay income tax on income earned by them during the year.  Further, Government provides tax breaks to companies investing in certain identified sectors like SEZ, Infrastructure etc.
  • Corporates can have super profits but they have invested huge sums of money in these identified sectors and hence do not pay taxes on their income.
  • Minimum Alternate Tax helps Government collect taxes from such corporates.
  • These taxes are computed considering the book profits and not tax profits.
  • Tax paid as MAT is allowed to be carried forward as tax credit and adjusted against regular tax liability which might arise in the future.


  • Dementia is not the name of a specific disease. It is an overall term to describe decline in mental ability so much so that it interferes with the day to day life of a person.
  • Dementia is caused due to damage in brain cells which in turn makes it difficult for the brain cells to communicate with each other. This damage will result in the following symptoms:
  • Memory loss, Inability to communicate and think normally, Cannot retain focus and pay attention, Changes in behaviour and feelings of a person, Decline in reasoning and judgment and Decline in visual perception.
  • Globally, about one in ten people above the age of 65 and one in four above the age of 85 years are prone to dementia.

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