Former Infosys CFO Mohandas Pai Urges Tax Reforms, Support For Middle-Class In Budget 2025

He also stressed the need for reforms in housing loans, noting that only 1.2 crore taxpayers benefit from deductions due to the limited uptake of home loans.

As the 2025 Union Budget is all set to be presented in parliament next month, former Infosys CFO TV Mohandas Pai has shared through a social media post on X (formerly Twitter) suggestions for significant tax reforms, especially for the middle-class population.

In his post, Pai suggested the government focus on supporting middle-class taxpayers who are facing rising costs, inflation, and stagnant incomes. His recommendations for the upcoming Budget seek to eliminate financial pressures and boost economic activity.

Pai pointed out the significant rise in individual tax collections, which grew from Rs 4.87 lakh crore in FY21 to Rs 10.45 lakh crore in FY24, marking a 114 per cent increase over three years. He proposed new tax slabs, suggesting no tax on income up to Rs 5 lakh, 10 per cent tax on earnings between Rs 5-10 lakh, 20 per cent for income between Rs 10-20 lakh, and 30 per cent for income exceeding Rs 20 lakh.

Pai proposed eliminating most tax deductions, except those under Sections 80D (for health insurance) and 80G (for charitable donations), and introducing these new tax slabs as an optional scheme to simplify the current complex structure.

For senior citizens, Pai suggested taxing income above Rs 7.5 lakh for those over 60 and Rs 10 lakh for those over 70. Additionally, he recommended exempting individuals earning up to Rs 5 lakh from filing income tax returns, unless they are claiming refunds.

Pai expressed concerns over the rising number of tax disputes, with pending amounts surpassing Rs 12.5 lakh crore. He called on the government to designate 2025-26 as the 'Year of Tax Dispute Resolution' and to streamline processes within the Central Board of Direct Taxes (CBDT).

He also stressed the need for reforms in housing loans, noting that only 1.2 crore taxpayers benefit from deductions due to the limited uptake of home loans.

Criticizing the absence of relief for middle-class taxpayers, Pai denounced what he called 'tax terrorism' and highlighted the disproportionate tax burden borne by this group. While more than Rs 9 lakh crore in subsidies support the bottom 60 per cent of the population, the middle class often remains neglected.

Pai's recommendations reflect growing frustration among India’s middle class, urging the government to introduce meaningful reforms. Amid rising economic pressures, these measures could provide much-needed relief and help restore taxpayer confidence.