Imagine this. Two families earn the same total income in a year. But one ends up paying zero tax, while the other pays a few lakh rupees. Sounds unfair? That’s exactly the gap a new idea, i.e., joint tax filing for married couples, is trying to address.
The suggestion, recently raised in Parliament by MP Raghav Chadha, is simple: if couples manage most of their finances together, why not file taxes together too?
Right now, India follows an individual tax system. Each person files separately, regardless of marital status. On paper, that sounds fair. But in reality, it doesn’t always work that way.
Gaurav Makhijani, Tax Head at Makhijani Gera and Associates, explains the issue clearly. “ to better utilise progressive tax slabs by pooling income. Currently, where one spouse earns significantly less (or nothing), their basic exemption and lower slab benefits often remain underutilised.”
This means households with a single earning member often end up paying more tax than families where income is split evenly.
A simple example that explains it all
To understand this better, consider two households earning Rs 24 lakh a year.
In one case, both spouses earn Rs 12 lakh each. In another, one spouse earns the full Rs 24 lakh while the other has no income. Despite earning the same total amount, the second household ends up paying around Rs 3 lakh in tax.
“Joint filing would enable households to optimise these unused thresholds, thereby reducing the overall tax burden,” Makhijani says, adding that the benefit would be most visible for single-income families.
In theory, yes. Pooling income could help couples make better use of tax slabs, rebates and deductions. It may even bring some relief to families where one partner has taken a career break or is not earning.
CA (Dr) Suresh Surana also points out that such a system could ease the pressure on the higher-earning spouse. “A joint filing mechanism would allow income pooling, thereby enabling better use of lower tax slabs and potentially reducing the effective tax rate for the household.”
But he adds a note of caution, i.e., how much you actually save would depend on how the slabs and deductions are structured under such a system.
While the idea looks attractive, it does come with its own set of challenges.
For one, joint filing could make tax returns more complicated for couples where both partners earn. Combining incomes, deductions, and tax credits into one return may require more effort and coordination.
Makhijani highlights this concern: “Preparing a consolidated return would require reconciliation of incomes, tax credits and deductions across both spouses. This could increase compliance effort, particularly in cases involving multiple income streams.”
There’s also the issue of accountability. If there’s an error in filing, both partners could be affected.
Any system that offers tax benefits comes with the risk of misuse, and joint filing is no exception.
Surana flags this clearly. “A joint filing framework carries inherent risks of misuse if adequate safeguards are not built in. Individuals may enter into non-genuine arrangements primarily to avail tax benefits.”
There could also be tricky situations where couples who are separated continue to file jointly just to save tax.
From the government’s side, joint filing could simplify some processes by combining two returns into one. But it could also make things more complex in certain cases.
Makhijani believes it may streamline assessments to some extent but adds that complications could arise in sensitive situations. “In adverse scenarios such as prosecution, determining responsibility between spouses could become challenging.”
Surana agrees that scrutiny may become more detailed, especially in high-value cases or where income shifting is suspected.
Globally, countries like the US and Germany already allow joint tax filing. But India has always followed an individual-based system.
Introducing such a change would require major updates to tax rules, systems, and filing processes. From TDS credits to return forms, everything would need to be aligned.
Surana puts it simply: “Introducing optional joint filing in India would mean a major change from the current system. While it is feasible, it would require careful planning and legal changes.”
The idea of joint tax filing does make sense, especially for families with uneven incomes. It could make the system feel more balanced and reduce the tax burden for many households.
But it’s not a quick fix. The benefits come with added complexity, possible misuse, and the need for strong safeguards.
For now, it remains an interesting proposal, one that has clearly struck a chord with many families, even if it’s still some distance away from becoming reality.