'FM has not done enough': Mohandas Pai says tax disputes have doubled since 2014

Mohandas Pai, Chairman of Aarin Capital, on Monday called on the Centre to address what he termed “tax terrorism,” expressing frustration over unresolved tax disputes that continue to burden citizens. In a post on X, he questioned Finance Minister Nirmala Sitharaman's handling of the issue, stating that despite promises made by the government in 2014, little has been done to reduce the backlog of tax cases that plague the legal system.

Pai's remarks came after BJP MP Jay Panda lauded the draft of the new Income Tax Bill 2025, describing it as a significant step in simplifying the tax code. Panda's tweet stressed the Bill's focus on modernising the tax language, reducing disputes, and improving compliance.

"Thanks Jay Panda, but pl tell us what provisions you have suggested to protect taxpayers against tax terrorism as our MP?" Pai wrote. "Budgets and amendments are rushed through Parliament without discussion because of many members disturbing proceedings. Tax officials get more powers to terrorize citizens. Tax disputes have doubled since 2014 when NDA promised to eliminate tax terrorism. Disputes take 15/20 years to settle in court and nobody seems to care about this harassment."

Pai's critique hinges on the persistence of what he sees as a failure to fulfill the promises made by the ruling government in 2014 to eliminate tax terrorism, a term used to describe the abuse of power by tax authorities. He continued, "Pl protect honest tax-paying citizens. You owe it to us as our MP. Sadly, our FM has not done enough, not enough, to reduce tax disputes—see the total amount stuck in disputes today as against 5 years ago. The data is presented to Parliament, but nobody seems to care. Possibly nobody even reads that famous table of tax disputes."

The former Infosys CFO's comments underscore the frustrations of many business leaders and taxpayers who believe the current system remains plagued by inefficiency and delays. Despite the government's promises of reform, tax disputes continue to overwhelm the system, leaving citizens in limbo as cases drag on for decades.

The revised Income Tax Bill 2025, which Finance Minister Sitharaman will table in the Lok Sabha on Monday after withdrawing the original version, is seen as a significant step in modernising the country's tax system. The Bill aims to replace the 63-year-old Income-tax Act with a new framework that is more digital-first, faceless, and transparent. According to the government, the revised code is designed to ease compliance and reduce the risk of corruption, with a focus on making the legal language more accessible to the public.

In her speech last year, Sitharaman emphasised the need for simplifying the tax code, noting that the first step in the reform process would focus on simplifying the existing law without introducing major changes to tax rates or exemptions. "The logic behind this—that the simplification of the tax code was a huge exercise in itself and needed to be implemented as the first major reform—was sound," said Jay Panda, who chairs the select committee reviewing the draft Bill.