PhysicsWallah receives ₹263.3cr tax demand for FY24.
Dispute over classification of investments as taxable income by authorities.
Company plans to challenge notice, citing strong legal grounds.
Despite notice, Q3 profit rises 33% and revenue grows 34%.
Edtech company PhysicsWallah has received a tax demand notice of ₹263.3 crore from an assessment unit of the Income Tax Department for 2023-24 assessment year.
The order, issued under Section 143(3) of the Income-tax Act, centres on a dispute over how investments received by the company during the financial year 2023-24 should be classified. The tax authority has treated those inflows — including funds from SEBI-registered Category II alternative investment funds — as taxable income, a characterisation PhysicsWallah firmly contests.
2 March 2026
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The company said in a stock exchange filing that it intends to challenge the demand before the appropriate appellate authority, adding that its preliminary assessment pointed to "strong legal and factual grounds" for doing so. The outcome will likely hinge on well-established questions around the tax treatment of private investment rounds, an area that has occasionally put fast-growing startups at odds with the department.
PhysicsWallah went public in November 2025 in an issue comprising a fresh share sale of ₹3,100 crore and an offer for sale component of ₹380 crore, through which co-founders Alakh Pandey and Prateek Maheshwari each offloaded shares worth ₹190 crore.
As a private company before the listing, it had raised close to $490 million from investors including WestBridge Capital, Lightspeed, Fidelity and Goldman Sachs. It entered the unicorn club in 2022 on the back of a $100 million Series A round, and closed its largest single fundraise — $210 million — in September 2024.
The tax notice arrives a month after PhysicsWallah reported its strongest quarterly numbers since listing. Net profit rose 33% year on year to ₹102.3 crore in the third quarter of FY26, while operating revenue climbed 34% to ₹1,082.4 crore. Its paid user base grew 21% over the same period to 43.7 lakh, with gains across both online and offline channels.
The statutory filing was made post-market hours on Wednesday. Today its stocks trading marginally lower at ₹86.70, down 0.14% for the day. The stock continues to trade significantly below its 52-week high.
[With PTI inputs]
