Ahead of the 2025 Union Budget, the Institute of Chartered Accountants of India (ICAI) has presented a proposal for joint taxation for married couples. Under this suggested model, a married couple would be regarded as a single taxable entity, merging their incomes when submitting taxes, akin to systems utilized in the United States and the United Kingdom.
Chartered Accountant Chirag Chauhan announced the proposal on X (formerly Twitter), stating, “ICAI recommends permitting joint income tax return filing for married couples. ” He further explained, “Theoretically, an individual income of Rs 7 lakh is tax-exempt; if married, the exempt threshold for the family would be Rs 14 lakh. ”
Under the proposed system, married couples would have the choice to file their taxes jointly or separately. The proposed tax brackets for joint filings are as follows:
– Up to Rs 6 lakh: No tax
– Rs 6-14 lakh: 5% tax
– Rs 14-20 lakh: 10% tax
– Rs 20-24 lakh: 15% tax
– Rs 24-30 lakh: 20% tax
– Above Rs 30 lakh: 30% tax
This system would increase the basic exemption limit for couples to Rs 6 lakh from Rs 3 lakh. Furthermore, ICAI proposes elevating the surcharge threshold from Rs 50 lakh to Rs 1 crore, with the following rates:
– Rs 1 crore to Rs 2 crore: 10% surcharge
– Rs 2 crore to Rs 4 crore: 15% surcharge
– Above Rs 4 crore: 25% surcharge
Under joint filing, both salaried partners would also gain from the standard deduction.
Currently, married couples in India file separately, which can lead to steeper taxes for families where one partner has a higher income. This system would favor families with two earners, as they can separately claim deductions. However, single-income families do not receive such benefits. In nations like the USA, joint filing allows families to diminish their tax liabilities by merging their incomes and claiming additional deductions and credits.
ICAI‘s proposal seeks to tackle the concern that the existing exemption limit is insufficient due to the high cost of living. It promotes income redistribution among family members to lower taxes.
Tax specialists believe the joint taxation system is improbable to be enacted in the forthcoming budget. “While joint taxation would be a helpful measure, the government might require time to introduce such a program as it would necessitate the establishment of a completely new framework with distinct slabs and rates, deductions, exemptions, surcharges, etc. Thus, it remains uncertain whether such a program will be rolled out in the upcoming budget,” stated SR Patnaik, partner, and head of taxation at Cyril Amarchand Mangaldas, a law firm.
CA Suresh Surana, discussing the proposal, informed Business Today that it is crafted to support families, especially when one spouse is the main income earner. He clarified that taxpayers would still have the choice to select between the default tax system and the regular tax regulations. The basic exemption limit for individuals is Rs 2. 5 lakh under the default system, but it could increase to Rs 3 lakh with joint filing.
