A same-sex couple has approached the Bombay High Court seeking to extend the tax exemption available on gifts exchanged between spouses under Section 56(2)(x) of the Income Tax Act to their relationship. However, the Income Tax Department has opposed the plea, arguing that the benefit cannot be granted because same-sex marriages are not recognised under Indian law, as reported by The Hindu.
The department has filed an affidavit before a Division Bench of Justices Burgess Colabawalla and Firdosh Pooniwalla, urging the court to dismiss the petition as “misconceived”. The Bench is yet to pronounce its order.
What does the petition seek?
The petition challenges the scope of Section 56(2)(x), which exempts gifts exchanged between spouses from taxation. The couple has sought to extend this exemption to same-sex partners.
Why has the Income Tax Department opposed the plea?
In an affidavit dated October 14, 2025, filed by Sandeep Dahiya, Principal Commissioner of Income Tax (Judicial), the department argued that the petitioners are attempting to secure a definition of “spouse” under the Income Tax Act that is inconsistent with Indian marriage laws.
According to the department, “The petitioners have not cited any law recognising their relationship as a marriage or recognising them as spouses,” and are instead seeking to have the Income Tax Act define marriage or spouse “contrary to the definitions under various marriage laws.”
It maintained that the interpretation of “spouse” under the Income Tax Act must align with marriage laws in India. Since same-sex marriages or spousal relationships are not recognised under any marriage law currently in force, the exemption under Section 56(2)(x) cannot be extended to same-sex couples.
The department further argued that the petition seeks to alter the meaning of “spouse” without any legislation recognising the petitioners’ relationship as a marriage.
It also contended that the writ petition amounts to “an abuse of the legal process” because “the relief sought does not pertain to the provisions of the Income Tax Act.”
What has the department asked the court to do?
The Income Tax Department has urged the Bombay High Court to dismiss the petition, reiterating that the exemption under Section 56(2)(x) is available only to relationships recognised as marriages under Indian law.
What happens next?
The matter has been heard by the Division Bench of Justices Burgess Colabawalla and Firdosh Pooniwalla. The court is yet to pronounce its order on the petition.
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