Budget Expectation – Keeping an eye on proposals like abolishing double penalty: Possible consideration of giving option of joint tax return to husband and wife

The middle class and tax payers are expected to get relief in the general budget. Consideration may be given to giving the husband and wife the option to file income tax returns jointly. The Institute of Chartered Accountants of India has suggested that married couples file a single return, in which tax slabs and exemptions are applied jointly, instead of separate returns. However, if both husband and wife are working, there will be an option to file separate returns. They can consider filing joint returns when they are getting benefits from it. The logic behind the suggestion is that there are a large number of families in India where the main source of income is only one person. Due to the existing individual tax slab, these families get the benefit of only limited exemptions. By implementing this system in countries like America, the already implemented joint tax system, tax calculation will be done by adding the income of husband and wife, which can increase the tax slab and exemptions. This system is already in force in countries like America. Along with this, there may be a proposal in the budget to exclude some cases from the category of crime under the Income Tax Act. It is suggested that in the spirit of the Tax Payers’ Charter, tax-payers should be considered honest and criminal action should be taken only in cases where there is clear evidence of concealment of income, mis-reporting or deliberate taking of illegitimate benefits. Under the Public Trust Act, criminal sections have already been removed in some cases. There may be a timeline for ending the old tax regime. There is little possibility of ending the old tax regime immediately, but the government may give indications about a long term phase out. There may be a hint of a provision like sunset clause in the budget. Along with this, there may be an emphasis on making the new tax regime more attractive. There is also a signal to end the system of imposing two fines for one mistake. At present, tax penalty of up to 200 percent is imposed under different sections on wrong reporting or wrong entry. It is suggested that the penalty be rationalized according to the seriousness of the mistake. Further relief can be provided in such cases, where tax was deducted but not deposited on time or there was a mistake in providing the documents. Like GST, it is also possible to introduce e-ledger system in income tax. To make the income tax system more transparent, it is also possible to introduce an e-ledger system. In this, there will be a record of advance tax, TDS and TCS credit of the tax payers, which can be adjusted from the current or next year’s tax. This is expected to make refunds easier and reduce the interface between the department and tax payers. Tax relief possible on merger-demerger of LPG: To make business easier, the government may also consider not imposing tax on reconstitution of Limited Liability Partnership (LPG). Like companies, startups and small businesses are expected to benefit by making the merger or demerger of LPG tax neutral. Girl hostels in every district, breakfast in PM nutrition, there may also be a proposal to build hostels for girl students in every district. The Education Ministry has suggested it to the Finance Ministry as a Centrally Sponsored Scheme. It is also possible to consider adding breakfast along with lunch in the PM Nutrition Scheme. According to experts, coming to school in the morning on an empty stomach affects the ability to learn. Also read this news… The new income tax law will come into effect from April 1, 2026: Tax year will replace assessment year, ITR filing will be easy; Know what will be the impact on taxpayers. The Central Government has replaced the old Income Tax Act 1961 with the new Income Tax Act 2025, which will come into effect from April 1, 2026. The biggest change in this will be the use of ‘Tax Year’ instead of ‘Assessment Year’ and ‘Previous Year’. This will cause less confusion for the common taxpayer in filing ITR, because the year of income earning and tax reporting year will be the same. This change is a big step towards simplifying the tax system. Read the full news…



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