Union Budget 2026: Finance Minister Nirmala Sitharaman is scheduled to present the Union Budget on February 1, 2026 and expectations are running high. This year's budget is anticipated to offer much-needed relief to the middle class and taxpayers. An interesting proposal being discussed is the possibility of allowing married couples to file their income tax returns jointly.
The Institute of Chartered Accountants of India (ICAI) has put forward a recommendation suggesting that married couples should be given the option to file a single, consolidated return. This would allow spouses to combine their incomes and deductions, rather than filing separately.
Under this proposal, couples could have the flexibility to choose between filing individually or jointly, depending on what benefits them financially each year.
At present, the Indian tax system requires all individuals married or not to file separate returns. Even when spouses share income or have joint expenses, each person is taxed individually.
Should couples opt for the joint-filing system, the tax slabs for such returns could be restructured. For example, one potential model suggests that a combined income of up to Rs 6 lakh could be tax-free, with a 5 per cent tax rate applied to income between Rs 6 lakh and Rs 14 lakh, and progressively higher rates for earnings beyond that.
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The reasoning behind this proposal is that in many Indian households, a single person is the primary breadwinner, and the current tax structure offers limited exemptions for families with this setup. A joint filing system would allow spouses to pool their incomes, potentially leading to higher tax exemptions and more favourable slabs. This system is already in place in various countries, including the United States.
While an immediate shift away from the old tax regime seems unlikely, the government may hint at a phased transition. The upcoming budget could include provisions for a "sunset clause" to gradually phase out the old system, alongside efforts to make the new tax regime more appealing. Additionally, there could be moves to reduce instances where double penalties are imposed for a single error.