Nitin Kamath
It is more important to earn in the stock market, it is more important to avoid harm and control your feelings. Zerodha co-founder and CEO Nitin Kamath has recently shared such a smart trick with his investment journey, which the common investors can also play wisely in the stock market by adopting.
Kamath said that if you are focusing only on buying good stocks but ignoring your behavior i.e. emotions and tax planning, then the way to make profit can be difficult. He says that keeping investment and trading separate is the real trick.
Surprise to keep secondary demat account
Sharing his old experience, Kamath said that before starting Zerodha, he had created two demat accounts when he was an active trader himself. An offline dimat account in which he had only long-term investment, and the other online account from which he used to trading.
The advantage of this was that selling his long-term stocks was not an easy task. They had to send physically delivery instruction slip and send them. This little difficulty became a behavior hack, which helped them to avoid emotional decisions. The result was that the stocks which they kept for a long time without being pierced, while their best returns were made.
Avoid implements selling
It is common for a sudden decline in the stock market or selling stocks in fear of any news. But this strategy of Nitin Kamath prevents impals selling. When you have to work hard to sell long-term investment, then you take a decision carefully and this thinking lays the foundation of profit in the long run,
Smart way to save tax
Not only discipline, secondary demat account is another big advantage, tax saving. In India, when you have short-term and long-term holdings in the same demat account, FIFO (First in, First Out) Rule is applied. This means that the first purchased stock is believed to be sold first. Even if you want to sell long-term holdings.
This can lead to disturbances in tax calculation and you can inadvertently pay more tax. But if you keep your long-term stocks in a separate demat account, then FIFO will apply separately to each demat account. This will not affect short-term trades your long-term investment,
When I was trading actively (before zerodha), I had an offline demat account where I help all my investments and an online account for all my trades. This was a way to avoid the temptation of “trading” my investments 😬
If i had to sell any of my investments, there was effort
– nithin kamath (@nithin0dha) September 10, 2025
Zerodha’s new feature: Secondary Dimat Account
Kamath said that Zerodha has now started the option to open secondary demat account for all users. This means that you can now easily keep your long-term and short-term investment in separate dimats. This will not only increase discipline, but will also be able to plan tax in a smart way.