Buybacks behave entirely differently from dividends, and it is worth understanding why.

When a company repurchases its own shares, nothing arrives in your account. No cash, no taxable event. Your share count stays the same. The benefit is indirect. Each remaining share represents a fractionally larger ownership stake in the business, which shows up gradually in the price over time. You only realise that benefit when you choose to sell. At that point it is a capital gain, taxed at the rates covered in 5.12.

Apple currently returns far more cash through buybacks than dividends. For an Indian investor holding Apple directly, this is structurally more efficient than receiving large quarterly dividends would be. The return compounds without annual tax friction, and you control exactly when the gain is realised.

When two otherwise similar US companies are compared, the one returning more capital through buybacks is the more tax-efficient holding for an Indian direct investor. That is not an accident. Many large US technology companies have structured their capital returns this way precisely because their shareholder base understands the arithmetic.