Under Section 68 of the Companies Act, 2013, a company may buy back its own shares out of its free reserves, the securities premium account or the proceeds of a fresh issue, but the buy-back in any financial year shall not exceed -

Section 68(2) of the Companies Act, 2013 provides that the buy-back shall be: (a) authorised by the articles of the company; (b) authorised by a special resolution passed at a general meeting, except that a buy-back of ten per cent or less of the total paid-up equity capital and free reserves may be authorised by a resolution passed by the Board; and (c) limited to twenty-five per cent of the aggregate of its paid-up share capital and free reserves in a financial year. The buy-back must be financed only out of free reserves, the securities premium account, or the proceeds of a fresh issue of shares.