Budget 2026: Joint Income Tax Filing for Married Couples Under Discussion
New Tax Reforms: Joint Income Tax Return for Married Couples: As India moves closer to the Union Budget 2026, discussions around meaningful tax reforms are picking up momentum. One proposal drawing significant attention is the introduction of a Joint Income Tax Return for married couples. Currently, India follows an individual-based tax filing system, but experts and professional bodies are advocating for a more family-centric approach. If implemented, this reform could reshape personal taxation in India by offering married couples an optional joint filing mechanism, potentially easing compliance and reducing the overall tax burden for many households. So, let us know about it through this article. This article is written by CA Manish Kumar Sinha.
“Get Married to save Taxes”:
As India prepares for the Union Budget 2026, a noteworthy discussion is gaining traction in economic and tax policy circles, i.e., the possibility of allowing husband and wife to file a joint income tax return. Till now, Indian tax law requires every individual, whether married or single, to file their own income tax return independently. ICAI, other experts, and professional bodies are urging the Government to reconsider this stance and offer optional joint filing for couples.
What Is a Joint Income Tax Return?
A joint income tax return is a tax filing in which a married couple combines their incomes, deductions and tax liabilities into a single return instead of filing separately. In such a system, common in countries like the United States and parts of Europe (Germany, etc.), the couple is treated as one tax unit for income tax assessment.
Under the current Indian Income Tax Act, each spouse must file his or her own return using separate Permanent Account Numbers (PANs), even if they share household finances or jointly hold assets or investments. Joint filing is not allowed in India, and any attempt to combine incomes except under specific clubbing provisions is not permissible.
How Would Joint Return Work?
If introduced, the joint filing option would allow both husband and wife to aggregate their incomes and deductions, and compute tax based on a combined tax slab structure. Professional bodies have recommended that the basic exemption limit and tax slabs be expanded proportionately to suit aggregated household income. For instance, under some proposals, the basic exemption for a family could be around ₹6–8 lakh, potentially doubling the individual threshold, though specifics remain under discussion.
Importantly, this system is expected to be optional, meaning couples can choose to continue filing separately if that offers a better tax outcome.
Mr. A has an income of ₹ 55 L, and Mrs. A has an income of ₹ 40 L. Now both are filing ITRs separately, and Mr. A has to pay surcharge on the above ₹ 50 L income.
If the joint return provision comes, and all sections like deduction, rebate, and income slab rate will and it will be combined for joint filing.
Mr. A and Mrs. A will have a joint income of ₹95 L, and the surcharge will be taxed on the above joint income of ₹ 1 crore. SO both assesses will benefit from the surcharge of tax, and it will be a saving for the family.
Joint tax filing offers several potential benefits:
• Lower Tax Burden for Single-Income Families: In households where one spouse earns significantly more than the other (or one spouse does not earn), combining incomes under a household slab could result in lower total tax.
• Efficient Use of Exemptions and Deductions: Currently, if one spouse does not fully use their basic exemption and deductions, those are effectively lost. Joint filing could allow more efficient use of these allowances.
• Simplified Compliance: Filing one return instead of two could reduce paperwork and compliance efforts for many couples.
• Global Alignment: Several developed economies already follow family-oriented tax assessment systems, and this change would align India more closely with global practices.
However, joint filing is not without drawbacks:
• Potential Higher Tax for Dual-Income Couples: In some cases, where both spouses earn similar incomes, combining them can push the household into a higher tax bracket, increasing total tax payable compared to separate filing.
• Complexity in Tax Planning: Introducing a new category of tax slabs and rules for joint assessment could add complexity initially, especially for tax administrators and return filers alike.
• Legal & Administrative Changes Needed: India’s current tax architecture, centered on individual PAN-based assessment, would require legislative overhaul to support joint filing. This includes revising IT return forms, rules, and compliance mechanisms.
• Divorce of a spouse: It will have practical difficulties in filing a joint return when both partners separate due to divorce or death.
Possibility in Budget 2026:
The Institute of Chartered Accountants of India (ICAI) has formally recommended introducing an optional joint income tax return for married couples in the upcoming Budget 2026. The proposal argues that such a system could make tax compliance easier and fairer, particularly for single-income or uneven-income households.
While the proposal has gained attention in pre-Budget discussions, no official announcement has yet been made. If accepted, the framework would likely appear in the Finance Bill accompanying the budget presented by the Finance Minister. Until then, the idea remains a potential reform under active consideration rather than confirmed law.
The joint filing option represents a significant shift in India’s personal tax policy, aiming to make the system more household-centric and equitable. Its merits, particularly for specific family structures, have made it a compelling topic ahead of Budget 2026. However, careful design and consultation will be key to ensuring that such a change benefits taxpayers broadly without unintended disadvantages. It will be great to have tax reforms in India.
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