New Delhi. Before the Union Budget 2026, a new discussion regarding tax has intensified. It is believed that the government may offer the option of ‘Joint Taxation’ for married people. If this system is implemented, then husband and wife will be able to file income tax return together. This can especially provide relief to those families where the responsibility of earning is on only one person. If this proposal is implemented, especially single earning families can save lakhs of rupees in tax.
Before the budget, the Institute of Chartered Accountants of India (ICAI) has given a special advice to the Finance Ministry regarding the budget. He has advised the husband and wife to give them the option to file joint returns. Currently, husband and wife have to file separate returns.
At present, the new tax system is the default system for income tax returns. However, taxpayers can also choose the old tax regime. Both have different tax slabs where the tax rate increases as the income increases. Under the new tax system, there is no tax on annual income of Rs 3 lakh, whereas in the old tax system, it is applicable for Rs 2.5 lakh per annum. In both, this limit is applicable to each member of the family separately.
Burden increases on married people
There are many households where only one person works. The second spouse takes care of the home, children and elders. Even though this work is very important, it is not considered to have any value in the tax system. The result is that such families have a higher tax burden.
At present, every person in India has to pay separate tax on his income. Even if he is married. Both husband and wife get different basic exemptions, slabs and deductions. Because of this, despite being married, the second spouse does not get the full benefit of tax exemption.
What is joint taxation system?
This means married couples should combine their earnings and file income tax returns together. For this it will be necessary for both of them to have PAN card. It is believed that the basic exemption limit can also be increased.
For example, if currently a person gets tax exemption up to Rs 3 lakh, then in joint filing this limit can be Rs 6 lakh or more. This will directly benefit the middle class families. Apart from this, home loan interest, health insurance and other deductions can also be adjusted in a better way. Even if both spouses are earning, they are said to be getting separate standard deductions.
Relief possible on surcharge also
Besides, relief may also be available regarding surcharge. Currently, surcharge is levied on income above Rs 50 lakh, but in combined taxation its limit can be increased to Rs 75 lakh or more. This will also provide relief to families falling in the higher tax bracket. If this proposal is implemented, it will be considered a major and historic change in India’s tax system. This will reduce the total taxable income and the family will be left with more money to spend.
These countries have joint taxation system
Many countries like America, Germany, Spain, Portugal allow married couples to file joint tax returns. There the family is considered an economic unit. India can also simplify and modernize its tax laws by adopting such a system.
