ICAI Proposes Joint Tax Filing Option for Married Couples in Pre-Budget Submission
ICAI has also suggested steps to reduce litigation, ease compliance, prevent tax avoidance, and rationalise income tax laws for a fairer and simpler tax system
Married Couples
Married Couples
The Institute of Chartered Accountants of India (ICAI) has put forward a new idea in its pre-budget suggestions for the Union Budget 2026-27. The institute has proposed giving married couples the option to file their income tax returns jointly instead of separately.
In most cases today, both spouses in India file their tax returns individually, even if they share income or expenses within the household. ICAI believes that giving couples the choice to file together could simplify the process and reduce misuse of tax slabs or deductions.
Under this system, a couple could combine their income and be taxed as one unit if that results in a fairer outcome.
Similar systems already exist in many countries. In the United States, couples can choose to file jointly or separately each year depending on what benefits them most. Germany and France also follow joint taxation models that lower taxes for families where one spouse earns much more than the other.
Ireland and Spain allow couples to decide each year whether to opt for joint or individual filing. These systems have helped in reducing tax evasion and encouraging transparency in household finances.
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Global experience also shows that joint taxation must be designed carefully. It can sometimes discourage the second earner, often women, from working more because their income adds to the total household income and is taxed at a higher rate.
India may cap the tax benefit or provide a special deduction for the second earner to prevent this loophole. This would make the system fair and balanced for all families.
Other key ICAI recommendations include reducing tax litigation through decriminalisation of minor offences, simplifying compliance with a year-wise E-Ledger for TDS and TCS, excluding speculative trading from presumptive income, and rationalising surcharge thresholds and medical deductions under the default tax regime.
About ICAI:
The Institute of Chartered Accountants of India is a statutory body set up under an Act of Parliament in 1949. It regulates the chartered accountancy profession in India and regularly gives policy suggestions to the government on taxation, auditing, and financial management matters.
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