Zerodha Founder and CEO Nithin Kamath has offered a sharp breakdown of why India’s startup ecosystem is filled with companies that prioritize growth over profitability — and how tax structures may be quietly encouraging it.

In a detailed post on X (formerly Twitter), Kamath explained that the way businesses and investors are taxed can heavily influence their strategies. “If you take money out of a business as dividends, the effective tax rate is 52% (25% corporate tax + 35.5% on personal income). Through capital gains, it’s just 14.95% (with cess),” he wrote. Advertisement

Kamath pointed out that this huge gap drives venture capitalists (VCs) and startup founders to operate in a way that minimises profits. “If you're an investor (especially a VC), the math is simple: reduce corporate t

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