Court denies tax benefits to same-sex couple as govt says marriage not recognised

The Bombay High Court on Thursday refused to grant interim relief to a same-sex couple challenging the constitutional validity of Section 56(2)(x) of the Income Tax Act, which exempts gifts exchanged between heterosexual spouses from taxation.

The petitioners, homemaker Payio Ashiho and lawyer Vivek Divan, have sought inclusion under the term “spouse” for tax benefits, arguing that the current provision results in unequal economic treatment for same-sex couples.

During the hearing, Additional Solicitor General Anil Singh, appearing for the Union government and the Income Tax department, informed the court that while the department had submitted its affidavit, the finance ministry required additional time to either adopt it or file an independent affidavit. Singh emphasised that same-sex marriage “is not recognised by law” and said the court must consider this while examining the petition.

The department’s reply asserted that the petitioners were attempting to “use the Income-tax Act to challenge the meaning of marriage/wife-husband/spouse as statutorily understood under different marriage Acts.”

It argued that no relationship could be recognised as “marriage” or “spouse” under the Income Tax Act if it was not similarly recognised under any marriage law in India. The reply also stated that the petitioners had not presented any legal provision that recognised their relationship as a marriage.

As the ministry sought a longer timeline, the petitioners’ counsel requested that the matter be heard urgently, noting the compliance deadline of December 31, 2025. The bench, however, clarified that the matter would not be resolved by December 31, saying, “After it is fully argued, we will require time to pass judgment.”

The petitioners also sought protection from any coercive action by the department, but the bench declined, questioning the basis of such a fear. “Where is the coercive action to pay the tax? At the end of the day, if you succeed, you will be entitled to a refund,” the court said.

The petitioners argued that nominees in same-sex relationships were treated differently from those in heterosexual marriages and that declining interim protection would amount to indirectly endorsing discrimination if the court later ruled in their favour.

The bench refused to entertain this argument, saying that no question of sanctioning discrimination arose before the case was heard.

The court also declined to keep the matter part-heard, which would have allowed the arguments to resume from the same stage in case of a change in the court’s roster.

The bench adjourned the matter to December 10, directing the finance ministry to file its affidavit so the hearing could proceed.

- Ends