The central government is considering providing significant relief to married taxpayers before the Union Budget 2026. The Union Finance Ministry is preparing to introduce an alternative joint taxation system. (Image X @FinMinIndia)
New Delhi: The central government is considering providing significant relief to married taxpayers before the Union Budget 2026. Reports suggest that the Union Finance Ministry is preparing to introduce an alternative joint taxation system. If this proposal is passed, married couples will be able to file their income tax returns together.
This will be most beneficial for families where only one member is earning. Currently, such families cannot fully utilize the exemptions and tax slabs of the non-earning spouse, leading to a higher tax burden.
Currently, the tax system in India does not differentiate between married and unmarried individuals. Both husband and wife have to pay taxes separately, with separate PANs, separate exemptions, and separate deductions. If the wife has no income, her basic exemption limit goes unused.
Considering this problem, the Institute of Chartered Accountants of India (ICAI) has suggested to the government that India should also have the option of joint tax filing, similar to the USA and Germany, where the family is considered an economic unit.
In joint taxation, the total income of the husband and wife will be combined, and taxes will be levied accordingly, potentially with separate tax slabs. It is believed that the basic exemption limit may also be increased. For example, if a single person currently receives a tax exemption up to ₹3 lakh, this limit could be ₹6 lakh or more under joint filing. This will directly benefit middle-class families. Additionally, home loan interest, medical insurance, and other deductions can be adjusted more effectively. Even if both spouses are earning, they are expected to receive separate standard deductions.
Furthermore, relief may also be provided regarding the surcharge. Currently, a surcharge is levied on income above ₹50 lakh, but in joint taxation, this limit could be increased to ₹75 lakh or more. This will also provide relief to families in the higher tax brackets. All eyes are now on the Union Budget 2026-27, which will be presented in Parliament on February 1st. The budget session will run from January 28th to April 2nd. If this proposal is implemented, it will be considered a major and historic change in India's tax system.
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