Budget 2026 Expectations: Will married couples receive a gift in the budget? Learn about 'Joint Taxation' and how it can save you money on taxes.

A major relief is expected for married taxpayers before Budget 2026. It's rumored that Finance Minister Nirmala Sitharaman may introduce the option of "joint taxation," allowing husband and wife to file their tax returns together. If this proposal is implemented, single-income families could save up to lakhs of rupees in taxes. This is why this issue is being hotly debated ahead of the budget. Let's understand how this rule, if implemented, will impact your savings and household budget.

Currently, in India, every individual is required to pay separate taxes on their income, regardless of whether they are married. Both spouses are entitled to different basic exemptions, slabs, and deductions. Consequently, despite being married, the other spouse is unable to fully benefit from the other spouse's tax exemptions, increasing the tax burden.

The Problem of Single-Income Families
Many households have one person employed or working, while the other spouse takes care of the home, children, and the elderly. While this task is crucial, it's often undervalued in the tax system. Consequently, such families face a higher tax burden.

What is joint taxation?

Joint taxation means that married couples file their tax returns together by combining their income. The proposal is to introduce this as an optional system in Budget 2026. This means that those who wish can remain under the current personal tax system, while those who wish can opt for joint taxation. Both parties will need to have a PAN.

Why is joint taxation necessary? Learn its benefits

In this system, the combined income of the spouses will be taxed under a separate slab. This will reveal the family's true tax-paying capacity. This can provide tax relief, especially for families where only one person earns.

A joint ITR will allow spouses to better adjust their home loan interest and medical insurance deductions.

Currently, if a husband earns ₹10 lakh and the wife takes care of the household, the entire ₹10 lakh is taxed. Under joint filing, the exemption limits for both will be combined, potentially reducing the tax burden by half.

What changes could be made to the tax slabs?

Under joint taxation, the basic exemption limit and tax slabs could be increased proportionately compared to the current system. For example, while a single individual is entitled to an exemption of ₹3 lakh, this limit could be doubled or more under joint filing. This would directly benefit middle-class families.

Relief on surcharges is also needed.

In the current tax system, a surcharge is levied on income above ₹50 lakh. Experts believe this limit should be increased to ₹75 lakh. In joint taxation, the surcharge limits could also be set proportionately, reducing the tax burden.

What about both husband and wife who are employed?
Even if both spouses are employed, they should not be disadvantaged. Therefore, it is proposed that both couples continue to receive separate standard deductions, even if they opt for joint taxation.

Facility to file joint tax returns in many countries
In many countries, such as the United States and Germany, married couples are allowed to file joint tax returns. There, the family is considered an economic unit. India could also simplify and modernize its tax laws by adopting such a system. The Institute of Chartered Accountants of India (ICAI) has made a suggestion to Finance Minister Nirmala Sitharaman that could introduce joint taxation in India, similar to developed countries.

If joint taxation is included as an option in Budget 2026, it would be a major and positive change for the Indian tax system. It would not only bring tax parity but also better reflect the true economic situation of families.

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