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Per Explanation II to Sec 68, 'free reserves' for buy-back purposes EXPRESSLY includes:
ARevaluation Reserve
BStatutory Reserve
CCapital Reserve
DSecurities Premium Account
Answer & Solution
Correct answer: D. Securities Premium Account
1. Step 1: Explanation II to Sec 68 clarifies that "free reserves" includes the Securities Premium Account.
2. Step 2: But it excludes unrealised gains / revaluation.
3. Step 3: Hence (B).
_Source: ICAI BoS CA Inter Paper 1, Ch 12 "Buy-Back of Securities"_