Stories
Same-Sex Couples Challenge Income Tax Exemption Rules for Spouses in India
- •A same-sex couple from Bengaluru has challenged the exclusion of same-sex partners from income tax exemptions on gifts given between spouses under Section 56(2)(x) of the Income Tax Act.
- •The legal dispute highlights the tension between anti-tax evasion measures and customary family support systems that allow tax-free transfers among specified relatives.
- •Experts discuss the doctrine of under-inclusion under Article 14 of the Constitution, examining whether legislative classifications unfairly exclude similarly situated individuals.
- •The case brings into focus the complex distinction between the formal legal recognition of marriage and eligibility for specific statutory or tax benefits.
Key Questions Answered
The dispute began after Bengaluru-based same-sex partners Anurag Kalia and Akhilesh Godi challenged the exclusion of same-sex partners from the gift tax exemption under Section 56(2)(x) of the Income Tax Act. The issue arose when Godi gifted Kalia a 22-karat gold bracelet that was a family heirloom, and Kalia was advised to declare it as taxable income because their relationship lacks legal recognition.
Section 56(2)(x) treats certain sums of money or property received without consideration or for less than its prescribed value as income from other sources when exceeding Rs 50,000. However, gifts received from specified relatives such as a spouse, along with exceptions like inheritance or gifts on the occasion of marriage, are excluded from taxation.
The Centre has opposed the plea before the Karnataka High Court, arguing that extending spouse-specific tax benefits to same-sex partners would amount to legally recognizing same-sex marriage under Indian law. Solicitor General Tushar Mehta maintained that tax provisions cannot be interpreted independently of the legal definitions governing marriage.
