Union Budget 2026: ICAI's Proposal for Joint Taxation of Married Couples
As the Union Budget 2026 approaches, a significant proposal from the Institute of Chartered Accountants of India (ICAI) is gaining attention in taxation circles. The professional accounting body has formally suggested that married couples should be permitted to combine their incomes and file a single, consolidated tax return. This recommendation aims to provide substantial financial relief to families that primarily depend on a single source of income.
Understanding the Joint Taxation Mechanism
The proposed system would allow spouses to merge their individual earnings—whether from salaries, business profits, investments, or other sources—into one aggregate income. They would then calculate their tax liability based on this combined figure, potentially benefiting from lower tax brackets and reduced overall taxation. Currently, India follows an individual taxation regime where each person files separately, regardless of marital status.
The ICAI's rationale centers on supporting households where one partner may be a homemaker, engaged in unpaid care work, or facing unemployment, while the other bears the entire financial burden. By enabling joint filing, such families could optimize their tax outgo, leaving more disposable income for essential expenses, savings, and investments.
Potential Impacts and Considerations
If implemented in the Union Budget 2026, this measure could:
- Simplify tax compliance for married couples by reducing paperwork and filing requirements.
- Offer progressive relief, particularly benefiting middle-class and lower-income families.
- Align India's tax structure with practices in several other countries that allow joint or family-based filing.
However, experts note that careful design would be needed to address complexities such as:
- Defining eligibility criteria and safeguards against misuse.
- Ensuring the system does not inadvertently disadvantage dual-income couples.
- Integrating with existing provisions like deductions, exemptions, and rebates.
The proposal, reported on January 21, 2026, reflects ongoing discussions about making India's tax regime more family-friendly and equitable. As stakeholders await the government's response, the ICAI's suggestion highlights a growing focus on holistic financial well-being in national policy-making.
