Budget 2026: India's top audit body has suggested Nirmala Sitharaman to change tax process for husband, wife

Ahead of Budget 2026 presentation by Finance Minister Nirmala Sitharaman on February 1, the Institute of Chartered Accountants of India (ICAI) has recommended that married couples should be given the option to file a single, joint return, meaning that the husband and wife should be allowed to combine their incomes and deductions, instead of two separate ones.

In other words: a married couple could choose what makes financial sense for them each year — file individually, or jointly.

Currently, under the Indian tax system, every individual — married or not — is taxed separately. Each spouse must file their own income tax return, even if they have shared income or joint expenses.


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What happens under new proposal?
According to a TOI report, the following outcomes would be the result if a couple opts to file a single consolidated Income tax return (ITR) under the joint-filing option:

Under the proposal, tax slabs for joint filers could be redesigned. One illustrative model suggests zero tax on combined income up to ₹6 lakh, a 5% rate for income between ₹6 lakh and ₹14 lakh, with higher slabs applying progressively beyond that.

Crucially, the joint filing system would be optional. Couples would be free to opt for joint taxation only if it offers a tax advantage; otherwise, they could continue filing separate returns, preserving flexibility under the existing framework.

Standard deductions for salaried taxpayers, along with exemptions and surcharge thresholds, may also be recalibrated. This could include a higher surcharge threshold and allowing separate standard deductions for each spouse if both are salaried.

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What could this mean for Indian households — a few scenarios

Household type	Possible benefits under joint taxation
Single-earner couple (spouse unemployed / homemaker)	Lower tax liability — combined exemption could reduce the overall tax burden; simpler ITR filing and compliance.
Dual-earner couple with modest incomes	May benefit from a higher basic exemption and standard deductions; could still pay less tax than filing two separate returns, depending on slab thresholds.
High-income dual-earner couple	Limited benefit in many cases, as combined income may push the household into a higher tax slab; requires careful evaluation.
Families with children, home loan, medical expenses	Joint filing may allow better optimization of deductions (such as standard deduction, Sections 80C and 80D, and housing-related benefits) if structured efficiently.

Source- The Times of India
(with TOI inputs)