Income Tax Returns for Married Couples: Joint taxation will especially benefit those couples in which one’s income is much higher than the other. By filing returns by combining their income, their tax liability will be reduced. Because tax liability will be decided on the basis of the average income of both.
In the Pre-Budget Memorandum 2025, the Institute of Chartered Accountants of India (ICAI) has suggested to the Central Government that married couples should be allowed to file joint income tax returns (Joint Taxation of Married Couples). The purpose of this proposal of ICAI is to reduce the increasing tax burden on families. Let us tell you that the joint taxation system is applicable in many countries including America and England.
Currently, you can either opt for the default tax regime under section 115BAC or choose the normal provision for taxation. Moreover, the basic exemption limit under the default scheme for individual taxpayers is Rs 2.5 lakh, and under the new/default regime, it can go up to Rs 3 lakh.
Existing tax breaks are not enough
In most families in India, only one member is the breadwinner, so considering the rising inflation, the current exemption limit is not enough. Even if there is a family of just four people, the current tax exemption seems less. Due to which people try to save their tax by splitting their income among the family.
Therefore, ICAI has suggested starting a joint taxation scheme for married couples. While this will reduce the tax burden on families, it will also curb tax evasion.
Total taxable income and tax rates
According to ICAI, there should be no tax on income up to Rs 6 lakh. Tax rate should be 5% on income up to Rs 6-14 lakh, 10% on income up to Rs 14-20 lakh, 15% on income up to Rs 20-24 lakh, 20% on income up to Rs 24-30 lakh and 30% on income above Rs 30 lakh. If both husband and wife are employed, then both should get the benefit of standard deduction.
Apart from this, ICAI has also recommended increasing the surcharge limit. They have proposed that special rates should be applied on income above Rs 1 crore, which should be as follows:
- On income between Rs 1 crore and Rs 2 crore: 10% surcharge
- On income between Rs 2 crore and Rs 4 crore: 15% surcharge
- Surcharge of 25% on income above Rs 4 crore
Benefit of joint taxation
Joint taxation will especially benefit those couples in which one’s income is much higher than the other. By filing returns by combining their income, their tax liability will be reduced. Because tax liability will be decided on the basis of the average income of both.
In this way, filing returns together can reduce their tax burden as compared to filing separate returns. Now it remains to be seen whether this recommendation of ICAI is accepted in Budget 2025 or not.
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