Tax Rules Overview
In 2025, a substantial overhaul of the personal income tax regulations took place. The changes made it so that annual incomes up to Rs 12 lakh became almost
entirely tax-free. However, the current system presents challenges. Currently, taxpayers have the option to choose between the old tax regime and the new default regime (Section 115BAC). Although the new regime raised the basic exemption limit to Rs 4 lakh, it doesn’t consider marital status or family size. This design disadvantages families reliant on a single income, despite facing higher household expenses. This setup highlights a need for improvements to ensure fairness and provide meaningful financial benefits.
Joint Filing Explained
The concept of joint taxation proposes an optional mechanism where married couples combine their incomes and file a single tax return. This approach could provide higher basic exemptions at the family level. It provides financial relief to households where one person primarily earns the income. This proposed system aims to create a more equitable tax system, especially for single-earner families. The joint filing system offers an avenue to simplify tax administration. By evaluating the overall household income rather than individual incomes, it attempts to streamline the process, potentially lessening the administrative burden.
Expert Insights and Views
Aman Gupta, Director at RPS Group, offers insight into the potential changes ahead of Budget 2026. He suggests that drastic tax slab changes are less likely, following the major revisions of the previous year. Instead, the government may favor incremental improvements. These could include raising standard deductions, revisiting tax slabs, and providing targeted benefits to middle-income earners. The approach is designed to provide relief amidst rising inflation and stagnant real wages. Such strategies indicate an effort to provide targeted financial assistance, directly combating the financial pressures many Indian families face.
How Joint Filing Works
Even with joint filing, individual benefits, such as standard deductions for salaried employees (Section 16(ia)), could remain applicable separately. From a policy perspective, joint taxation aims to make the tax system fairer. This could benefit single-earner families. It would simultaneously simplify tax administration, making the overall process more efficient. Salaried employees, particularly those in the middle class, are hoping for relief. The anticipation is fueled by the hope for lower tax burdens and more take-home pay. With Budget 2026 imminent, the focus is on potential adjustments that would directly address financial strains faced by Indian taxpayers.
