'Pushpa 2' - It's already a hit!
& how India’s billionaires avoid paying taxes (legally!)
Have you ever wondered how India’s richest keep growing their wealth while their tax bills seem… surprisingly small? They’re not breaking any laws. Nope. Instead, they’re using the system to their advantage, playing by the rules but knowing exactly where to find the fine print.
So, how do they do it? Let’s break it down together, desi-style, because these strategies aren’t just about money.
But before we start, let’s take a look at today’s top business news:
📌 Byju’s still in trouble
The company’s chief content officer, Vinay Ravindra, and his ally Rajendran Vellapalath are facing some serious financial sanctions in the U.S. A judge is considering slapping them with millions in fines after they allegedly drained over $1 million from Byju's U.S. software companies under court supervision. These companies were part of Byju's $820 million acquisition, and now lenders, owed over $1.2 billion, are trying to liquidate them.
So, Byju’s is in deep water both in India and the U.S.
📌 IndiGo earns the title of one of the worst airlines
The 2024 AirHelp Score report is out, and it’s got some pretty interesting results. IndiGo made its way into the list of the worst airlines globally, and it's in some pretty rough company, alongside Tunisair and Ryanair. The rankings take into account everything from customer complaints to on-time performance, and let’s just say, some North American carriers like JetBlue and Air Canada didn’t do too well either.
📌 ‘Pushpa 2: The Rule’ is releasing tomorrow!
But it is already creating a massive buzz. Allu Arjun is back as Pushpa Raj, and experts are predicting it could earn a whopping Rs 1,000 crore globally, with the Hindi version alone set to bring in Rs 500 crore. The advance bookings are already setting records at Rs 50 crore! It's expected to beat Baahubali 2 and K.G.F: Chapter 2 for India’s highest-grossing film.
📌 Is Unacademy getting acquired?
Allen Career Institute is reportedly in advanced talks to buy Unacademy for $800 million. Now, that's a huge drop from Unacademy's $3.4 billion valuation back in 2021. The deal has been in the works for a while, but it's all hanging on approval from Allen’s promoters, the Maheshwari family. The next step is figuring out the share swap ratio, which will decide how much equity Unacademy shareholders will get.
If this goes through, it could be one of the biggest mergers in India's edtech sector. However, Unacademy’s founding team, including Gaurav Munjal, might be stepping away post-merger following some major restructuring at the company. They've already laid off 250 employees and lost some top execs.
📌 CarDekho is in trouble
They saw a slight dip in revenue for FY24 - down 3.5%, with total revenue dropping to Rs 2,250 crore from Rs 2,332 crore last year. The main reason? They closed their used car business. But here’s the good news: they managed to cut their losses by 40%, dropping from Rs 566 crore to Rs 340 crore.
What’s really interesting is their insurance segment, which saw crazy growth, skyrocketing by 8X to Rs 743 crore! The transaction business, including ads, dealer connections, and financial services, was their biggest revenue driver, growing 16.5% to Rs 930 crore. They did a great job managing expenses, especially advertising, and even improved their margins.
📌 Indian trains are not safe anymore
Did you know that in 2024, there have been 29 train accidents in just 8 months? Sadly, these incidents resulted in 17 fatalities and 71 injuries. But here's the good news: train accidents have been significantly decreasing over the years.
From 2004-2014, there were about 171 accidents a year on average. Fast forward to 2014-2024, and that number dropped by 60%, with only 68 accidents annually. The government has been investing heavily in safety - this year alone, they spent over Rs 1 lakh crore on improving the railway infrastructure and technology.
Now, about billionaire’s saving taxes:
Capital gains
First off, let’s talk capital gains tax. Here’s how it works: if you earn a regular salary, you can be taxed up to 30%. But if you earn through investments – stocks, properties, or other assets – your tax rate drops significantly.
For example:
Long-term capital gains (LTCG) (assets held for over a year) are taxed at just 10% if your profit is above ₹1 lakh.
Now, think about Mukesh Ambani. His official salary is just ₹15 crore a year (peanuts compared to his wealth). Why? Because most of his income comes from Reliance shares. The tax he pays on those? A fraction of what you’d pay on a similar salary.
Family trusts
Ever heard of family trusts? Rich families use these to pool their assets, minimize taxes, and plan for the future. In India, family trusts also help sidestep future problems like inheritance taxes (which, thankfully, we don’t have… yet).
Here’s the deal:
Trusts can split income among family members, reducing the overall tax burden.
They also protect assets from legal issues and ensure smooth wealth transfers.
It’s like a family treasure chest – secure, tax-friendly, and ready for future generations.
The Mauritius magic
Ah, the Mauritius route. Once upon a time (pre-2017), investments routed through Mauritius were entirely exempt from capital gains tax. Even after the loophole closed, any investments made before April 1, 2017, are still tax-free.
Many billionaires and companies jumped on this bandwagon, parking their funds in Mauritius-based entities to enjoy these benefits. It’s not as big a deal now, but oh boy, it was the tax trick back in the day.
Dividends? No, Thank You
Dividends used to be taxed at just 10%, but post-2020, they’re taxed at the shareholder’s slab rate. So, what do billionaires do? They avoid taking dividends altogether and let their wealth grow within their companies.
When they do need money, they often reinvest it in tax-saving options like Section 80C instruments. Smart, no?
Offshore accounts: The legal way
When we say “offshore accounts,” you probably think of some shady dealings. But for billionaires, it’s all about compliance. They park funds in tax havens like the Cayman Islands or Singapore, but they disclose everything under the Black Money Act.
As long as they report these holdings to the Indian government, it’s all above board. And the perks? Lower tax rates abroad, plus a diversified portfolio.
Investing in startups
Did you know that selling property and reinvesting the gains in startups can save you from paying capital gains tax? That’s thanks to Section 54GB.
For billionaires like Ratan Tata, this isn’t just about tax-saving – it’s about spotting the next Ola or Paytm while reducing their tax bills.
HUF
You’ve probably heard of the Hindu Undivided Family (HUF) system. It’s a great way for families to split income and reduce taxes. HUFs get a separate tax exemption of ₹2.5 lakh annually, and many wealthy families use this structure to save more.
So, what can we learn?
Here’s the bottom line: billionaires aren’t magicians – they’re just better at using the law to their advantage. And honestly, many of these strategies aren’t just for the super-rich.
Of course, not everyone has a team of tax advisors, but with a little knowledge, we can all play the game smarter.
So, that’s it from me today. See ya 👋
