As Budget 2026 draws closer, one major expectation is again gaining strong momentum — the introduction of an optional joint income-tax filing system for married couples, where spouses could file a combined return with a higher family-level exemption limit of Rs 6–8 lakh.
For many single-income families struggling with rising living costs, this could become an important relief measure and a major shift in India’s personal tax structure.
Why this joint taxation demand is growing
Last year’s tax overhaul radically changed expectations. CA (Dr.) Suresh Surana explains the changing landscape in clear terms:
“The major overhaul of India’s personal tax system in 2025 under which annual net total income up to Rs 12 lakh effectively became tax-free has fundamentally reshaped expectations around future reforms. With a large segment of middle-class taxpayers now outside the tax net, the next phase of reform is expected to focus on structural improvements that address household-level economic realities rather than individual taxation alone.”
He adds that changing family dynamics and rising expenses are pushing policymakers to consider joint filing more seriously:
“With rising household expenses and an increasing number of families dependent on a single primary earner, there is growing policy interest in exploring a joint income-tax filing mechanism for married couples.”
Under the current rules, even married couples are treated as separate taxpayers, which often results in an uneven tax burden for households with a single earner.
The Institute of Chartered Accountants of India (ICAI) has also suggested this idea in its pre-budget suggestions for the Union Budget 2026-27. The institute has proposed giving married couples the option to file their income tax returns jointly instead of separately. In most cases today, both spouses in India, if earning, file their tax returns individually.
What the proposed joint filing system could look like
Surana outlines how joint filing could help reduce this imbalance:
“In order to address this imbalance and more accurately reflect the financial structure of Indian households, an optional joint taxation scheme for married couples may be introduced. Under this mechanism, spouses could file a single combined return, with a family-level exemption limit which may range between of Rs. 6-8 lakhs, effectively doubling the current individual threshold.”
This would allow families to utilise a higher exemption limit, especially useful for those where only one spouse earns an income.
He also explains how standard deductions may work: “For salaried couples, the standard deduction under Section 16(ia) may continue to apply separately to each spouse, even under a joint filing system. A joint taxation system could provide meaningful relief to households where one spouse is the principal or sole earner, thereby aligning tax policy with the economic realities of modern Indian families.”
A higher exemption and flexible brackets could ease pressure on middle-class families and improve overall tax equity.
How other countries handle this
Surana points out that India would not be the first to consider such a system:
“Internationally, several advanced economies including the United States and the United Kingdom already permit joint filing for married couples, recognising shared family responsibilities and enabling more efficient tax planning.”
Adopting a similar structure could help India align with global norms and improve household financial stability.
What changes would be needed in the law
Introducing joint filing wouldn’t be a simple tweak — it would require deeper changes. Surana highlights this clearly:
“It is pertinent to note that introducing such joint filing would, however, necessitate comprehensive changes to the Income-tax Act, including reworking the thresholds of deductions, exemptions, surcharges, and compliance procedures in case of joint filing.”
Despite the complexity, he believes this could be a major opportunity: “As Budget 2026 approaches, this may represent as a significant reform opportunity that could reshape the approach to personal taxation and strengthen financial support for families.”
What to expect now
With policymakers exploring ways to support single-income households and make taxation more equitable, the demand for joint filing is stronger than ever. Whether the government takes this step in Budget 2026 remains to be seen — but the case for a Rs 6–8 lakh family-level exemption and joint return option is now firmly on the table.