Policy · Education & Skilling

PhysicsWallah faces ₹263.3 Cr tax demand from income tax department

By Startup Enthusiast · 18 March 2026

What they do

PhysicsWallah provides test preparation for over 35 exam categories including JEE and NEET

The Income Tax Department issued a notice treating private investment funds as taxable income

Shares rose nearly 8% despite the notice as the company plans to appeal the order

The Income Tax Department issued a tax demand notice of ₹263.3 Cr against PhysicsWallah.
The notice was issued under Section 143(3) of the Income-tax Act by the assessment unit.
Tax authorities treated investments received during FY2023-24 as taxable income rather than capital.
This classification included funds raised from SEBI-registered Category II Alternative Investment Funds (AIFs).
PhysicsWallah plans to challenge the order citing strong legal and factual grounds for appeal.
Each co-founder sold shares worth ₹190 Cr via the IPO offer for sale component.
The largest private round was a $210 Mn raise in September 2024.
Founders Alakh Pandey and Prateek Maheshwari sold shares worth ₹190 Cr each via IPO offer for sale.

The dispute highlights regulatory scrutiny on how edtech startups classify venture capital inflows.
Treating equity investments as income significantly impacts the reported profitability of high-growth startups.
The market reacted positively with shares rising 7.87% to close at ₹86.8 on BSE.
The company's recent financial results showed strong growth supporting its valuation metrics.

PhysicsWallah offers test preparation for over 35 exam categories like JEE, NEET, UPSC, and SSC.
It operates an offline presence through Vidyapeeth and Pathshala centres in 175+ cities.
Key offline hubs include Kota, Bareilly, Patna, Noida, Delhi, Kolkata, Ahmedabad, and Jaipur.
The company is expanding into K-12 learning via owned schools and online products.
Segments include K5, Foundation, and CuriousJr for early-stage learning needs.
Additional verticals include PW Skills for digital marketing, web dev, and AI-ML training.
Study Abroad services cover IELTS and TOEFL preparation for international education seekers.
Other offerings include Agriculture, Chessmate, Spoken English, and Online Degrees programs.
The platform hosts over 10 Million tests, sample papers, and notes for students.

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