'Are we captives of Finance Ministry?': Ex-Infosys CFO Mohandas Pai urges Sitharaman to respect middle-class

Former Infosys Chief Financial Officer (CFO) Mohandas Pai on Thursday urged Finance Minister Nirmala Sitharaman to respect the middle-class taxpayers who have mostly supported Prime Minister Narendra Modi. "There is no point in talking about the past," he said while responding to a speech in the Lok Sabha, where Sitharaman said the Congress government did not do anything for the middle class from 2004 to 2014.  

"The middle class is angry and upset at policies being thrust down their throat when they have borne the brunt of taxation for the last 10 years," Pai said, and asked why indexation was removed retrospectively in such an insensitive manner. "Are we citizens or captives of @FinMinIndia?" 

The former Infosys CFO urged the finance minister to respect the middle-class taxpayers and not keep humiliating them by such one-sided insensitive tax policies.

Speaking in the Lok Sabha, Sitharaman on Wednesday said a narrative was being about the Modi government that it was 'not doing anything' for the middle class. "I want them to understand that this country had 98% taxation in one of the earlier regimes, which also never cared about the fundamental rights of the citizens. The regime which brought in the Emergency," she said. 

The finance minister argued that for the corruption that happened between 2004-14, the public of India would have been much better if that money had been in the coffers rather than the pockets of a few dynastic leaders.

In the Budget 2024, Sitharaman lowered the long-term capital gains (LTCG) tax on real estate to 12.5 per cent from 20 per cent without the indexation benefit. The move faced pushback from the middle class who felt the tax liability had been increased. 

Pai had also opposed the move, saying the Centre had broken the trust of the middle class with this "thoughtless action". He also urged the government to exempt all previous matters. 

Following criticism, Sitharaman restored the indexation benefit on the sale of properties bought prior to July 23, 2024. Now, individuals or HuFs who purchased houses before July 23, 2024, can opt to pay LTCG tax under the new scheme at the rate of 12.5 per cent without indexation or claim the indexation benefit and pay 20 per cent tax. 

On Wednesday, the finance minister put a staunch defence of her Budget, saying it has eased the tax burden of the middle class and the relaxing of capital gains tax provision on property transactions was a reflection of the government accepting the common man's expectations. She said the tax incidence on the middle class has been reduced with the increase in a standard deduction by 50 per cent and the Budget brings about simplification of the tax regime without raising rates.