Same-S*x Couples Cannot Claim Spouse Tax Benefits Without Legal Marriage, Income Tax Department Tells Bombay HC

The Income Tax Department has told the Bombay High Court that same-s*x couples cannot claim the spousal exemption under the Income Tax Act unless their union is first legally recognised as a marriage. The submission came in response to a petition filed by a same-s*x couple challenging the constitutional validity of a provision that grants tax exemption on gifts only between heterosexual spouses.

The department argued that Section 56(2)(x) of the Income Tax Act, which exempts gifts from tax when received from relatives including spouses, cannot be extended to same-s*x partners through judicial interpretation. It said such recognition must first come through a change in marriage law.

What The Petition Argues

The case was brought by Payio Ashiho and his partner Vivek Divan, who approached the Bombay High Court seeking inclusion of same-s*x couples within the scope of the spousal exemption under Section 56(2)(x). The provision exempts gifts exceeding Rs 50,000 from tax when received from relatives, but the law does not separately define the term spouse. S*x Between the Husband and Wife Must Be Consensual, Says Gujarat High Court; Denies Bail to Man Accused of Subjecting Wife to Unnatural S*x and Physical Cruelty.

The petitioners argued that because the exemption is available only to heterosexual couples, the law treats same-s*x partners unequally and violates their constitutional right to equal treatment. They asked the court to interpret the term spouse in a manner that extends the benefit to same-s*x couples in comparable relationships. Modi Government on Same-S*x Marriage: ‘May Not Be Correct Course of Action’, Says Centre on Supreme Court’s Hint at Declaration on Gay Marriages.

Government's Position In Court

Appearing for the Union government, the Income Tax Department maintained that same-s*x marriages are not recognised under Indian law, and that the exemption available to spouses cannot be extended through a court order. The department pointed to the Supreme Court's 2023 constitution bench ruling, which held that legal recognition of same-s*x unions can only be granted through legislation, not judicial directions.

The Bombay High Court had earlier, in November 2025, declined to grant interim relief to the couple, noting that the alleged discrimination stems from the law itself rather than from the court's own conduct. The bench had said it could not pass an interim order shielding the petitioners from tax liability, though any amount paid could be refunded if they eventually succeed in the case.

Background To The Case

The petition was originally filed in August 2025, after which the Bombay High Court issued notice to the central government. It draws on the Supreme Court's 2023 marriage equality judgment, which stopped short of granting same-s*x couples the right to marry but directed the government to examine extending certain economic benefits, including joint bank accounts, pensions and succession rights, to queer couples regardless of formal marital status.

The matter is scheduled for a detailed hearing before the Bombay High Court, where both sides are expected to present fuller arguments on the constitutional questions involved.

(The above story first appeared on LatestLY on Jul 09, 2026 07:55 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).