The Institute of Chartered Accountants of India (ICAI) has proposed allowing married couples to file a joint income tax return in India, a move that could significantly reduce the tax burden for single-earner households and simplify compliance, while remaining optional for others.

At present, husband and wife are treated as separate tax units and are required to file individual income tax returns. ICAI has suggested that the household be recognised as an economic unit, with married couples given the choice to file a single joint return or continue with individual filings.

ICAI President Charanjot Singh Nanda said the proposal reflects the structure of Indian families. “In most Indian households, only one person earns while the entire family depends on that income.

Because of this, the available tax exemptions and deductions often fall short. Joint taxation can increase disposable income for household expenses, savings, investments and children’s education,” he said.

Under the suggested framework, both spouses with valid PANs would be allowed to file one joint return. The basic exemption limit and standard deduction would effectively double for couples opting for joint filing. ICAI has also recommended that taxpayers should be free to stay in the existing individual filing system.

Explaining the benefit for single-earner families, Nanda said, “If the basic exemption limit under the new tax regime is Rs 4 lakh, a joint return can raise it to Rs 8 lakh. This directly reduces the tax burden for families where one spouse is non-earning.”

For example, if only the husband earns Rs 8 lakh annually and the wife has no income, the entire income is currently taxed in the husband’s hands. Under a joint filing system, the combined exemption limit could cover the full Rs 8 lakh, resulting in no tax liability.

ICAI has also highlighted benefits for households where both spouses earn, but incomes are uneven. For instance, if the husband earns Rs 12 lakh a year and the wife earns Rs 3 lakh, both currently file separate returns, and the higher-earning spouse may fall into a higher tax slab.

Under joint filing, the combined income of Rs 15 lakh would be taxed with higher exemption limits and wider slabs, potentially lowering the overall tax outgo.

Optima Money Managing Director Pankaj Mathpal said, “When one spouse earns significantly more than the other, joint filing can average out income and keep the family in a lower tax bracket. This can lead to genuine tax savings.”

However, experts cautioned that joint taxation may not benefit all families. In cases where both spouses earn similar incomes, the combined income could push them into a higher tax slab.

For example, if both husband and wife earn Rs 10 lakh each, their combined income of Rs 20 lakh could attract a higher rate if slabs are not adjusted adequately.

“This is why the system must be optional,” Saxena said. “For some dual-income couples, individual filing will remain more beneficial. The choice should rest entirely with taxpayers.”

The proposal may also simplify taxation of jointly owned assets. At present, income from assets such as house property is often taxed under clubbing provisions if one spouse has funded the purchase.

For example, if a house is jointly owned but funded by one spouse, rental income is usually taxed in that person’s hands, sometimes leading to disputes.

Nanda said, “Joint taxation can reduce legal complications where assets are jointly owned, but income is taxed in one person’s hands. A single joint assessment can improve clarity and compliance.”

ICAI has pointed out that similar systems exist in several countries. In the United States, married couples can opt for ‘married filing jointly’, which effectively doubles tax thresholds. Countries such as Germany and Portugal also allow joint assessment, while some European nations follow family-based taxation models.

Experts acknowledged that implementation would involve challenges, including changes to tax software, refund mechanisms and data integration. They also noted the need for clear rules in cases of separation or divorce.

“Administrative hurdles will be there, but these can be managed with clear provisions,” Saxena said. ICAI has submitted the proposal as part of its pre-Budget memorandum. Attention is now focused on the Union Budget 2026 to see whether the government considers introducing optional joint income tax filing for married couples, a step that could reshape household taxation in India.