New Delhi: Finance Minister Nirmala Sitharaman is set to introduce a new tax regime in the Union Budget 2026 aimed at simplifying India’s tax system. The proposed framework focuses on lower tax rates, simpler slabs, broader exemptions, and a reduction in complex compliance rules. As part of this reform, the government is considering an Optional Joint Taxation system for married couples, allowing them to file taxes as a single financial unit.
Under the current Income Tax Act, both spouses pay taxes separately on their individual earnings. The new proposal would enable couples to declare their combined income and calculate tax jointly, even if both are earning. This approach, already in practice in several developed countries, is expected to help taxpayers plan their finances more efficiently and reduce compliance burdens.
The joint taxation system could significantly increase the combined tax exemption limit for couples. Compared to filing separately, joint filing would allow for larger consolidated exemptions, reduce overall tax liability, and eliminate the need for spouses to submit two separate Income Tax Returns each year. This would simplify the process and cut down on paperwork, making tax administration more efficient.
Experts say the system would particularly benefit middle-class families and households with a single primary earner. In cases where one spouse earns significantly more than the other, joint filing could lower the applicable tax slab, increase savings, and raise disposable income. Economists expect that higher disposable income for households could, in turn, boost consumption and contribute to overall economic growth.