Joint Taxation for Married Couples: A Proposal for Budget 2026:

Joint Taxation for Married Couples: A Proposal for Budget 2026 In India, income tax is calculated for each person individually. Every individual gets their own basic exemption limit and tax slabs, and even married couples have to file their taxes independently. This happens even though, in real life, most families share income and expenses. The tax system treats married couples as two completely separate units, regardless of how the household actually functions. This creates an imbalance, especially in families where only one spouse earns. The non-earning spouse often contributes significantly by managing the household, and providing overall stability. These contributions are economically valuable, but they are not recognised anywhere in the tax structure.

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As the Union Budget 2026 approaches, many tax experts believe this system does not adequately recognise married couples as an economic unit. Many developed countries, such as the United States, already allow spouses to file taxes jointly if they choose. This helps align tax liability more fairly. To address such issues, it is proposed that Budget 2026 introduce an optional Joint Taxation mechanism that allows married couples to file a joint return of income. The new system will offer the option for taxpayers to either continue under the current system of individual taxation or select joint taxation. Under this new scheme, Instead of taxing each spouse separately, the government would add both spouses’ incomes together and tax them as one household, using special tax brackets meant for couples. The idea is that taxes would be based on how much money the family earns overall, not just what each person makes individually.

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Proposed Slab Structure of Joint Taxation The following slab structure may be introduced as under for joint filers:

Total Joint Income	Rate of Tax
Up to Rs 8,00,000	Nil
Rs 8,00,001 - Rs 16,00,000	5%
Rs 16,00,001 - Rs 24,00,000	10%
Rs 24,00,001 - Rs 32,00,000	15%
Rs 32,00,001 - Rs 40,00,000	20%
Rs 40,00,001 - Rs 48,00,000	25%
Above Rs 48,00,000	30%

Rationalisation of Surcharge Thresholds under Joint Taxation regime Under the default tax regime, an issue arises because the surcharge still starts once a person’s total taxable income crosses Rs 50 lakh. Individuals and HUF taxpayers, the surcharge threshold under the default regime will be increased from Rs 50 lakh to Rs 75 lakh for individuals and HUFs. Along with this, the other surcharge limits can be adjusted proportionately to keep the system fair and balanced.

Rs 1.5 crore to Rs 3 crore	10% Surcharge
Rs 3 crore to Rs 5 crore	15% Surcharge
Above Rs 5 crore	25% Surcharge

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Treatment of Salary Income and other Adjustments In situations where both husband and wife earn a salary, each of them should continue to get their own standard deduction on salary income. Keeping the deduction separate for each spouse makes the tax system fair, so families with two earning members are not worse off than families with only one earning member simply because they opted for joint taxation.