A landmark petition filed by a same-sex couple has been admitted by the Bombay High Court, potentially setting the stage for a constitutional debate on taxation and LGBTQIA+ rights in India. The case, reported by The Economic Times, was admitted by a division bench comprising Justice BP Colabawalla and Justice Firdoush Pooniwalla, which has also issued a notice to the Attorney General of India, noting that the matter raises a significant constitutional question.
The petitioners, Payio Ashiho, a homemaker, and Vivek Divan, a lawyer with experience at the Bombay High Court and the United Nations headquarters, contend that a provision in the Income Tax Act unfairly discriminates against same-sex couples. They argue that under the current law, gifts exchanged between heterosexual couples enjoy tax exemptions, while those between same-sex partners are taxed, placing them at a clear economic disadvantage. Advocate Dr Dhruv Janssen-Sanghavi is representing the couple in court.
The challenge centres on Section 56(2)(x) of the Income Tax Act, which stipulates that any money, property, or asset received without adequate consideration, valued at over Rs 50,000, is taxed as “income from other sources.” The law’s fifth proviso exempts gifts from taxation when they are received from “relatives,” including “spouses.” However, the Act does not explicitly define the term “spouse.” In practice, heterosexual couples, whether formally married or presumed to be married, can qualify for the exemption since they can legally marry under Indian law. Same-sex couples, however, are excluded from this exemption because their unions are not legally recognised.
The petitioners have urged the court to declare the reference to “spouse” unconstitutional insofar as it excludes same-sex couples. They have asked for the exemption to apply to partners in long-term, stable same-sex relationships and for tax authorities to be restrained from reassessing or imposing penalties on transactions between them. Notably, they have clarified that they are not seeking legal recognition of same-sex marriage but rather equal treatment under existing tax provisions.
This case carries potentially far-reaching implications for the LGBTQIA+ community, as it could influence property ownership, investment planning, and inheritance rights. While the Supreme Court’s 2018 judgment in Navtej Singh Johar v. Union of India decriminalised same-sex relationships, the Court in 2023 declined to recognise same-sex marriages under the Special Marriage Act, leaving many related legal rights unaddressed.
Legal experts believe the outcome will hinge on whether the High Court adopts an expansive interpretation of the word “spouse.” Ashish K Singh, managing partner of Capstone Legal, observed that for the petitioners to prevail, the court would need to interpret the term broadly enough to encompass same-sex partners. “However, the biggest bottleneck would be the fact that no legal provision in India recognises the rights of same-sex couples,” he said, underlining the challenge ahead.
If the petition succeeds, it could open the door for a more inclusive reading of financial and property laws in India, even in the absence of formal marriage recognition — a step that activists say is long overdue.
