Ahead of Union Budget 2025, to be presented by finance minister Nirmala Sitharaman on February 1, the Institute of Chartered Accountants of India (ICAI) has suggested ‘joint taxation’ for married couples, calling for them to be seen as a single taxable unit.
The idea is to give married couples the option to combine their income for tax returns, similar to the systems already existiing in countries such as the US and UK.
“ICAI suggests allowing joint income tax return filing for married couples. Ideally, an individual income of ₹7 lakh is exempt from tax; if married, the exempt limit for the family would be ₹14 lakh. Will #budget2025 introduce this new concept?” wrote on social network X.
What is the proposal?
ICAI’s proposal calls for married couples to have the choice of submitting returns as separate individuals or, as suggested by the ICAI, as a single unit.
What are the proposed tax slabs?
Up to ₹6 lakh (annual income): No tax
₹6 lakh-14 lakh: 5 per cent tax
₹14 lakh-20 lakh: 10 per cent tax
₹20 lakh-24 lakh: 15 per cent tax
₹24 lakh-30 lakh: 20 per cent tax
> ₹30 lakh: 30 per cent tax
Additionally, under the joint filing system, the basic exemption limit would be doubled from ₹3 lakh to ₹6 lakh. Further, the ICAI has recommended raising the surcharge threshold from ₹50 lakh to ₹1 crore. The surcharge would apply as follows: 10 per cent ( ₹1 crore- ₹2 crore), 15 per cent ( ₹2 crore- ₹4 crore) and 20 per cent (> ₹4 crore).
Both partners would also benefit from the standard deduction.
Current tax system for married couples
Currently, husbands and wives file taxes individually, resulting in higher tax when one earns more than the other. The system works better for families where husband and wife are salaried, as each can claim deductions separately.
On the other hand, single-income families miss out on these benefits.
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