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ICAI suggests allowing joint income tax return filing for married couples. Ideally, an individual income of Rs 7 lakh is exempt from tax; if married, the exempt limit for the family would be Rs 14 lakh.
Under this proposed system, married couples would have the option to file taxes jointly or individually.
Ahead of the Union Budget 2025, the Institute of Chartered Accountants of India (ICAI) has proposed the introduction of a joint taxation system for married couples. This would allow couples to file taxes as a single taxable unit, enabling them to combine their incomes, similar to the systems already in place in countries like the US and the UK.
“ICAI suggests allowing joint income tax return filing for married couples. Ideally, an individual income of Rs 7 lakh is exempt from tax; if married, the exempt limit for the family would be Rs 14 lakh,” Chartered Accountant Chirag Chauhan said in a post on X.
Under this proposed system, married couples would have the option to file taxes jointly or individually. The new approach is designed to benefit families where one partner is the primary earner, helping reduce tax burdens and preventing tax avoidance.
The proposed tax slabs for couples filing jointly are as follows:
- Up to Rs 6 lakh: No tax
- Rs 6-14 lakh: 5% tax
- Rs 14-20 lakh: 10% tax
- Rs 20-24 lakh: 15% tax
- Rs 24-30 lakh: 20% tax
- Above Rs 30 lakh: 30% tax
One of the key features of this joint filing system is that the basic exemption limit would double to Rs 6 lakh from the current Rs 3 lakh. The ICAI has also recommended raising the surcharge threshold from Rs 50 lakh to Rs 1 crore. The proposed surcharge rates are:
- Rs 1 crore to Rs 2 crore: 10% surcharge
- Rs 2 crore to Rs 4 crore: 15% surcharge
- Above Rs 4 crore: 25% surcharge
Additionally, both partners in a salaried couple would be able to benefit from the standard deduction under the joint filing system.
How the Joint Taxation System Could Work
Under the joint filing option, families would be able to lower their tax liabilities through additional deductions and more favourable tax rates, compared to filing individually. This system would effectively reduce the overall tax burden for families, particularly those with a single primary earner.
Current Tax System for Married Couples
Currently, married couples in India file taxes separately, which can lead to a higher tax burden if one spouse earns significantly more than the other. This system generally benefits dual-income families, as each spouse can claim individual deductions. However, single-income households miss out on these benefits.
In countries like the USA, the joint filing system helps lower the overall tax burden by combining the incomes and offering extra deductions and credits, which the ICAI’s proposal aims to replicate.
The ICAI has also pointed out that the current basic exemption limit is insufficient in light of rising living costs. They have suggested that families could explore shifting income to other members of the household to reduce tax liabilities.
What Experts Say
Despite the potential benefits, tax experts believe that the implementation of joint taxation may not happen in the upcoming budget.
“While joint taxation will be a beneficial move, the government may take time to introduce such a scheme, as it would require a complete overhaul of the existing regime with different slabs, rates, deductions, exemptions, surcharges, etc. Hence, it is uncertain if such a scheme will be introduced in the upcoming budget,” said SR Patnaik, Partner and Head of Taxation at Cyril Amarchand Mangaldas, a law firm.
CA Suresh Surana has said ICAI’s proposal is designed to support families, especially those where one spouse is the primary earner. He added that people would still have the option to choose between the default tax system and the joint filing scheme. Under the current system, the basic exemption limit for individuals is Rs 2.5 lakh, but it could increase to Rs 3 lakh if the proposal is accepted.
