New Delhi: A same-sex couple has moved the Bombay High Court, arguing that a provision in the Income Tax Act unfairly discriminates against them by taxing gifts exchanged between partners, according to a report by Economic Times. The court has admitted their petition with Justices BP Colabawalla and Firdoush Pooniwalla issuing a notice to the Attorney General as the case raises important constitutional questions.
Challenging Tax Inequality
The case has been filed by Payio Ashiho, a homemaker, and his partner Vivek Divan, a lawyer who has previously practised at the High Court and worked with the United Nations. The couple argues that the current tax laws unfairly disadvantage same-sex couples by offering them unequal economic treatment compared to heterosexual couples. They are being represented in court by Advocate Dr. Dhruv Janssen-Sanghavi. (Also Read: Trump Imposes Higher Tariffs Even As India Boosts Oil, Gas Imports From US)
Tax Exemption Gap for Same-Sex Spouses
According to Section 56(2)(x) of the Income Tax Act, if someone receives money, property, or any asset worth over Rs 50,000 as a gift without giving anything in return, it is taxed as “income from other sources.” However, there’s an exemption when such gifts come from ‘relatives’ — including ‘spouses’. The catch? The Act doesn’t clearly define who qualifies as a ‘spouse’, which creates confusion for same-sex couples.
Tax Relief Denied to Same-Sex Couples
In India, heterosexual couples, even those not officially married but seen as being in a relationship can enjoy tax exemptions on gifts exchanged between partners, thanks to legal recognition. However, same-sex couples don’t get the same benefit as their relationships aren’t legally recognised as marriage. (Also Read: ITR Filing 2025: Key Precautions To Take & What Happens If You Miss The Deadline — Know Before You File)
Why This Case Matters for LGBTQIA+ Community
This case is important for the LGBTQIA+ community because it could impact key areas like investments, property rights, and inheritance. While the Supreme Court decriminalized same-sex relationships in 2018, it did not recognize same-sex marriages under the Special Marriage Act in 2023. Legal experts say the outcome depends on whether the court takes a broader view of the term “spouse.” Ashish K Singh, managing partner at Capstone Legal, told The Economic Times that the petitioners’ success hinges on the court interpreting “spouse” in a more inclusive way.