The Bombay High Court has denied interim tax relief/income tax exemption to same-sex couples, highlighting the exclusion of LGBTQ+ partnerships from Section 56(2)(x) exemptions. The ruling raises critical questions about equality and financial rights under Indian tax law.
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MUMBAI: The Bombay High Court has refused to grant interim relief to a same-sex couple challenging the Income Tax Act’s Section 56(2)(x), which currently allows tax exemption on gifts exchanged only between heterosexual spouses.
The petitioners, Payio Ashiho, a homemaker, and lawyer Vivek Divan, argued that the law creates economic inequality, denying same-sex couples the same benefits afforded to heterosexual couples.
Representing the Union government, Additional Solicitor General Anil Singh emphasized that same-sex marriages are not legally recognised in India. The Income Tax Department argued that only relationships recognised under Indian marriage laws can qualify for tax exemptions under Section 56(2)(x).
The department further contended that the petitioners were effectively attempting to redefine marriage and spouse through tax law, which is governed by separate statutes.
Court’s Ruling
The bench clarified that the case could not be resolved before the December 31, 2025, compliance deadline. It denied the petitioners’ request for protection from coercive action by the tax department, stating that any disputed tax could be refunded if the petitioners succeed.
The court also refused to entertain arguments about indirect discrimination at this stage, emphasizing that such questions would be addressed only after a full hearing.
The matter has been adjourned to December 10, with the Finance Ministry directed to file its affidavit.
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