Zerodha CEO Nithin Kamath’s Hilarious Advice on Dodging Capital Gains Tax: Buy Bad Stocks

Nithin Kamath’s Advice to Avoid Capital Gains Tax:

Nithin Kamath, the co-founder and CEO of Zerodha, had a witty take on how to avoid paying capital gains tax. He shared a humorous tip on X, suggesting that investors should research and find the best stocks but then ignore them and buy the worst performers instead. This way, he joked, investors would make losses and thus have no capital gains to be taxed on.

Kamath posted, “Now that we have processed the capital gains tax increase, here’s something on a lighter note,” along with a meme on X.

Budget 2024 Tax Changes:

In the 2024 Budget, Finance Minister Nirmala Sitharaman introduced new tax proposals for stock market investors. The Long-Term Capital Gains (LTCG) Tax was raised from 10% to 12.5%, and the Short-Term Capital Gains (STCG) Tax increased from 15% to 20%. Additionally, the Securities Transaction Tax (STT) on equity and index trades doubled from 0.01% to 0.02%, impacting traders involved in Futures and Options (F&O).

Unlisted bonds, debentures, debt mutual funds, and market-linked debentures will still be taxed on capital gains at the applicable rates, regardless of the holding period.

Finance Minister’s Goals:

Nirmala Sitharaman explained that the changes aimed to simplify the tax system and reduce the average taxation rate to encourage market investment. She emphasized the government’s commitment to making taxes simpler, improving taxpayer services, providing tax certainty, and reducing litigation while increasing revenues to fund development and welfare schemes.