Budget 2026 Wishlist: Joint Filing for Spouses Could Slash Tax Liability

• ICAI recommends allowing spouses to file joint income tax returns to the Finance Ministry for Budget 2026.
• Currently, husbands and wives must file separate returns, with each entitled to a basic exemption of Rs 2.5 lakh (old regime) or Rs 4 lakh (new regime).
• Joint taxation could reduce the tax burden, especially for families dependent on one income, and prevent income misrepresentation.
• Countries like the US, Germany, and Portugal already permit joint filing, offering benefits like avoiding higher tax brackets for combined incomes.
• ICAI suggests doubling the basic tax exemption limit for joint filers, potentially making families with up to Rs 8 lakh annual income tax-free.

Why It Matters: Joint tax filing for spouses, as proposed by ICAI, could significantly reduce tax burdens and simplify compliance.