ICAI Suggests Joint Taxation for Married Couples to Government
The Institute of Chartered Accountants of India (ICAI) has recommended that the government introduce a joint taxation system for married couples in the country. This proposal aims to simplify tax compliance, promote financial equity within households, and align India’s tax framework with global standards.
In its suggestion, ICAI highlighted how joint filing could provide significant tax relief to middle-income families by allowing them to combine their income and benefit from higher exemptions and deductions. “A joint taxation system could encourage savings, investment, and greater workforce participation, particularly among women,” said a statement from ICAI.
The concept of joint taxation is already prevalent in countries like the United States, where married couples can file returns together and avail of tax benefits. ICAI emphasized that a similar system in India could incentivize economic growth and simplify the tax filing process for families.
Key features suggested includes:
1. Combined Income Filing: Couples could file their taxes together, consolidating incomes for tax purposes.
2. Higher Deduction Limits: Additional exemptions for housing loans, education, and healthcare expenses.
3. Dependent Deductions: Special provisions for families with dependents, such as children or elderly parents.
While the proposal has generated excitement, experts note potential challenges. Critics argue that joint taxation could lead to disparities for single individuals and demand careful structuring to avoid exploitation.
The government is yet to officially respond, but sources suggest the idea is being considered for the upcoming Union Budget. Tax policy analysts see this as a step toward modernizing India’s tax framework, making it more inclusive and family-friendly.
With ICAI’s endorsement, the discussion around joint taxation for married couples gains credibility and momentum, signaling a possible shift in the country’s approach to taxation.