Would Zerodha still be in business then?: Ashneer Grover challenges Nithin Kamath's tax logic

A sharp tax critique by Zerodha co-founder Nithin Kamath has triggered a public clash with BharatPe's Ashneer Grover and opened a new front in the debate over whether India’s startup scene is building real businesses or just chasing big exits.

Kamath, posting on X, broke down how India’s tax structure pushes startups to prioritize capital gains over profitability. He explained that drawing profits as dividends can result in a total tax hit of up to 52%, while selling shares attracts just 14.95% in capital gains tax. Advertisement

“If you're an investor (especially a VC), the math is simple,” Kamath wrote. “Reduce corporate tax by showing minimal profits or losses. Spend on acquiring users, build a growth narrative, and then sell shares at a higher valuation while paying much lower tax.”