Union Budget 2025: Infosys ex-CFO Mohandas Pai calls for relief to 'long suffering' middle class taxpayers

Budget 2025 expectations: Mohandas Pai, former CFO and Board Member at Infosys, on Wednesday sought a reduction in personal income tax rates, especially affecting the middle class taxpayers in the country. Addressing a post to PM Narendra Modi, Finance Minister Nirmala Sitharaman on the New Year, Pai noted that the middle-class taxpayers have suffered the most in the last few years and it is the time to introduce much-awaited tax relief for this section of the taxpayers. 

In a post on X, Pai said: "PM Sir, best wishes for 2025. Pl make it a year of Big Reforms-Budget 25-26 should be start. Pl give relief to long-suffering middle-class IT payers. They are very upset with NDA but voted for you. The individual tax collection has gone up from Rs 4.87l cr in 20-21 to Rs 10.45l cr in 23-24! 114% increase over 3 years. 24-25  gross Individuals IT collection up by 22%, net may reach 12.5l cr! MC (middle class) IT payers are seeing much lower cash to spend due to high taxes, inflation, very high school and college fees,lower increase in income!"

Pai called for a decrease in personal income tax rates to boost the disposable income of the middle class. He emphasized the importance of providing relief to the "honest middle class" who pay income tax but often receive little to no support compared to the poor. Pai urged the Finance Ministry to address the issue and ensure that this segment of society is not overlooked when it comes to tax relief.

Elaborating on tweaking the tax slabs to offer some relief to middle-class taxpayers, Pai suggested the government to expand the tax slabs - up to Rs 5 lakh no tax, Rs 5-10 lakh only 10%, Rs 10-20 lakh 20%, above Rs 20 lakh -- max 30%, with senior citizens only above Rs 50 lakh. No deductions except Section 80 D and 80G. Scheme as an option in lieu of current complex option. 

He added the government can offer some support to seniors above the age of 60 years, by exemption till Rs 7.5 lakh. For seniors, above 70 years, there should be no taxable income till Rs 10 lakh. With exemptions like no file return till Rs 5 lakh unless for refund.

"Middle-class IT payers are seeing much lower cash to spend due to high taxes, inflation, very high school and college fees, lower increase in income! Pl enlarge tax slab- upto Rs 5l no tax, 5-10l only 10%, 10-20l 20%, above 20l  max 30%, with SC only above 50l. No deductions except 80 D and 80G. Scheme as an option in lieu of current complex option. For seniors above 60 tax to kick in only at 7.5l, seniors above 70 no tax till 10l income. No compulsion to file return till 5l unless for refund," Pai wrote on X.

When it comes to home loans, Pai mentioned that while the deduction for housing loans is substantial, only 1.2 crore out of 3.5 crore taxpayers are eligible for this benefit due to their possession of housing loans. In order to boost consumer spending, it is crucial to provide individuals with extra funds. This will also result in enhanced compliance from businesses.

"Today deduction for housing loan is big but only 1.2cr  tax payers out of 3.5 cr payers can get this as only they have housing loan. People need more money to spend. This will increase compliance from business too. Pl give big relief to long suffering middle class," Pai said. 

He also suggested that 2025-26 as Year of Tax dispute resolution as disputed amounts today above Rs 12.5l crore from Rs 4.5 lakh in 2014. 

"Pl Stop TAX TERRORISM as promised in 2014! Disputed amounts today above Rs 12.5l cr from Rs 4.5l in 2014. Big failure of ITD and @FinMinIndia. Pl declare 2025-26 as Year of Tax dispute resolution. Focus on clearing tax disputes only Pl do not create new disputes for 2025-26 Every year appeals at CIT A has only gone up, shows gross inefficiency, tax terrorism and lack of focus by CBDT. Pl punish officials who lose multiple cases in court. Data says more than 70% disputes lost in appeal showing big tax terrorism and multiple cases of bad assessments... PM Sir pl intervene and ensure relief. These are your long term staunch voters  and supporters who have suffered immensely," Pai wrote on X.

Many experts and industry bodies have noted that the middle class is more than just an economic group; they serve as the foundation of the nation, seeking policies that strike a harmonious balance between affordability and opportunity.