Comment on Bootstrapping vs Funding - a tax arbitrage

Abhishek Soni commented on 31 May 2021, 08:41 AM

@Nitin,
Whereas the coverage is really great, but taking out profits as a salary remains the best option, considering:

(Taking your latest 100 Cr. Salary payout as an example)

— Currently, on 100 Cr. company got the tax benefit by way of claiming the expenditure, and Mr. Nitin and team paid tax as salary income at slab rate.

–In case of dividend, tax would have come to nearly 65% (30% company and 35% Mr. Kamath)

— For buy back, maximum 25% of capital which can be bought back. And you’re the 100% shareholder.

Also, for a VC, the end goal would always be to sell stake & earn growth for its partners/firm, its never to earn a certain % ROI, that’s not what the characteristics of that money, allows to do so 🙂

Looking forward if there are any value additions to it 🙂

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