Demand for Joint ITR for Married Couples: Raghav Chadha Raises the Issue

Income Tax: Raghav Chadha points out that, currently in India, husbands and wives are required to file their taxes separately. This means that their earnings are treated as distinct incomes, even though their household expenses are shared.

Income Tax: Rajya Sabha MP Raghav Chadha has raised a significant issue in Parliament. He stated that India's current income tax system does not treat married couples fairly, as husbands and wives are taxed as separate individuals, despite sharing the same household and expenses.

What is the Full Story?

Raghav Chadha explains that, under the current system in India, husbands and wives must file their tax returns individually. This implies that their respective incomes are considered separate entities, even if their household expenses are shared. He has proposed that the government introduce an "Optional Joint Tax Filing" system. This would allow married couples, if they so choose, to file their Income Tax Returns (ITR) jointly. Such a measure could significantly reduce the tax burden for many families.

Understanding the Difference Through an Example

Chadha illustrated this point in a simple manner:

Family 1: Both the husband and wife earn ₹10 lakhs each. Their combined income totals ₹20 lakhs; however, since they file their returns separately, they benefit from tax exemptions, potentially resulting in a zero tax liability.
Family 2: In this scenario, only one individual earns the entire ₹20 lakhs, while the other manages the household. The total income remains the same—₹20 lakhs—yet in this case, the family is required to pay approximately ₹1.92 lakhs in taxes. Essentially, the disparity lies solely in whose name the income is registered, despite both families sharing the same household.

What is the Problem with the Current System?

Chadha argues that the existing tax system fails to recognize the family as a single unit. According to him, "The same roof, the same kitchen, the same budget... yet when it comes to taxes, the family is treated as separate entities."

How Does It Work in Other Countries?

In many countries, married couples are provided with the option to file their tax returns jointly. Countries such as the US, Germany, and France offer facilities like "joint filing" or "income splitting," which help reduce the tax burden.

How does the new tax system work?

India currently operates under a new tax system that provides a rebate on income up to approximately ₹12 lakh. Consequently, if a husband and wife each earn ₹10 lakh individually, they are not required to pay any tax. However, if a single individual earns the entire ₹20 lakh, they are liable to pay tax. If the government accepts this proposal by Chadha, married couples could stand to gain significant benefits—particularly those families where only one member is an earner, while the other takes care of the household or children.