What Is ‘Joint Taxation’? How Couples Will Benefit From ‘Joint Taxation’ Proposed by ICAI? All You Need To Know Ahead of Union Budget 2025–26
Mumbai, January 30: ICAI (Institute of Chartered Accountants of India) has proposed a significant reform ahead of the Union Budget 2025, urging the government to implement ‘joint taxation’ for married couples, treating them as a single taxable unit. At present, spouses file their taxes separately. This system is more favourable for families where both partners have salaried jobs, as each can claim individual deductions.
In January 2025, the ICAI submitted recommendations for revising the Income-tax Act, which is currently under review by a committee at the Central Board of Direct Taxes (CBDT). The proposed joint taxation system seeks to reduce the financial strain on families with one primary earner and curb tax evasion. One key proposal under this system includes raising the basic exemption limit for couples filing jointly from INR 300,000 to INR 600,000. Budget 2025 Income Tax Relief: Good News Likely for Salaried Employees in Union Budget 2025-26, Nirmala Sitharaman May Hike Income Tax Slabs and Standard Deduction.
The ICAI highlighted that similar joint taxation systems are already implemented in countries like the United States, which focus on family-centric taxation. Additionally, the proposal recommends proportional adjustments to other tax limits, including an increase in the Alternate Minimum Tax (AMT) threshold for those choosing to opt out of the default tax regime. Budget 2025 Income Tax Proposal: ICAI Urges Centre To Introduce Joint Tax Filing for Married Couples in Union Budget 2025-26.
What Is the ‘Joint Taxation’ Proposal?
The ICAI’s ‘Joint Taxation’ proposal suggests that married couples be given the option to file their taxes individually or as a unified unit. Under this system, tax rates would be structured as follows: Under this system, tax rates would be structured as follows: no tax for annual incomes up to INR 6 lakh, 5% for INR 6 lakh-INR 14 lakh, 10% for INR 14 lakh-INR 20 lakh, 15% for INR 20 lakh-INR 24 lakh, 20% for INR 24 lakh-INR 30 lakh, and 30% for incomes above INR 30 lakh. The basic exemption limit would be raised from INR 3 lakh to INR 6 lakh, and the surcharge threshold would be increased from INR 50 lakh to INR 1 crore, with a 10% surcharge for incomes between INR 1 crore and INR 2 crore, 15% for INR 2 crore-INR 4 crore, and 20% for incomes exceeding INR 4 crore. Both spouses would also benefit from the standard deduction under this proposal.
(The above story first appeared on Today News 24 on Jan 30, 2025 02:37 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website todaynews24.top).