ICAI Proposes Joint Taxation for Married Couples in Budget 2025
As deliberation on Union Budget 2025 commences, the Institute of Chartered Accountants of India (ICAI) has proposed that for married couples 'joint taxation' be declared, treating both partners as a single unit for taxation purposes. This scheme seems to allow the couple to file together or as single units under an income tax-return filing system in countries such as the USA and the UK.
Proposal Description
The proposal of the ICAI now gives married couples solely the option to file tax returns individually or jointly, treating them as a single unit. Under the scheme, the basic exemption limit would be increased to double that of ICAR basic exemption limit from ₹3 lakh to ₹6 lakh. Moreover, it has recommended that the threshold for surcharge be raised from ₹50 lakh to ₹1 crore at the following rates - 10% - on an income between ₹1 crore and ₹2 crore; 15%- on the income of ₹2 crore to ₹4 crore; and 20% - on an income above ₹4 crore. The standard deduction would be available to both partners.
Proposed Tax Slabs for Joint Filers
- Up to ₹6 lakh: No tax
- ₹6 lakh to ₹14 lakh: 5%
- ₹14 lakh to ₹20 lakh: 10%
- ₹20 lakh to ₹24 lakh: 15%
- ₹24 lakh to ₹30 lakh: 20%
- Above ₹30 lakh: 30%
Current Taxation Framework for Married Couples
Presently, in India, spouses file taxes individually. This system can result in a higher tax burden when one partner earns significantly more than the other. While dual-income families can claim deductions separately, single-income families often miss out on these benefits.
Potential Benefits of Joint Taxation
Implementing joint taxation could lead to a more equitable tax structure for families, especially those with a single income source. By allowing couples to combine their incomes, the tax liability may be reduced, providing financial relief to many households.
As Finance Minister Nirmala Sitharaman prepares to present the Union Budget on February 1, 2025, it remains to be seen whether this progressive proposal will be adopted, potentially reshaping the taxation landscape for married couples in India.