New Delhi: The inside government is considering providing significant relief to married taxpayers surpassing the Union Upkeep 2026. Reports suggest that the Union Finance Ministry is preparing to introduce an volitional joint taxation system. If this proposal is passed, married couples will be worldly-wise to file their income tax returns together.
This will be most salubrious 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.
What is the system?
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 vital exemption limit goes unused.
Considering this problem, the Institute of Chartered Accountants of India (ICAI) has suggested to the government that India should moreover have the option of joint tax filing, similar to the USA and Germany, where the family is considered an economic unit.
What is joint taxation?
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 vital exemption limit may moreover be increased. For example, if a single person currently receives a tax exemption up to 3 lakh, this limit could be 6 lakh or increasingly under joint filing. This will directly goody middle-class families. Additionally, home loan interest, medical insurance, and other deductions can be adjusted increasingly effectively. Even if both spouses are earning, they are expected to receive separate standard deductions.
Will there be relief on surcharge?
Furthermore, relief may moreover be provided regarding the surcharge. Currently, a surcharge is levied on income whilom 50 lakh, but in joint taxation, this limit could be increased to 75 lakh or more. This will moreover provide relief to families in the higher tax brackets. All vision are now on the Union Upkeep 2026-27, which will be presented in Parliament on February 1st. The upkeep session will run from January 28th to April 2nd. If this proposal is implemented, it will be considered a major and historic transpiration in India's tax system.
