Can a same-sex couple claim tax exemption on gifts as “spouses” under the Income Tax Act without marriage being legally recognised? The Income Tax Department has told the Bombay High Court that such benefits cannot be granted unless the relationship is first recognised as marriage or spouse under Indian law.
MAHARASTRA: The Income Tax Department has told the Bombay High Court that same-sex couples cannot claim tax exemption benefits available to “spouses” under Section 56(2)(x) of the Income Tax Act unless their relationship is first legally recognised as marriage or spouse under Indian law.
The issue came before the Bombay High Court in a plea filed by same-sex couple Payio Ashiho and Vivek Divan. They have challenged the constitutional validity of Section 56(2)(x) of the Income Tax Act, saying that the provision indirectly discriminates against homosexual partners because tax exemption on gifts is available to recognised spouses, but Indian law does not presently recognise same-sex partners as spouses.
Section 56(2)(x) of the Income Tax Act taxes money, property or assets received without consideration when the value is more than Rs 50,000. Such receipts are treated as income from other sources. However, the law gives exemption when such gifts are received from specified relatives, including spouses.
The same-sex couple has argued that this benefit is given to heterosexual couples, while same-sex couples are left out because the word “spouse” does not include them under the present legal framework.
The Income Tax Department has opposed the plea. In an affidavit dated October 14, 2025, filed before the division bench of Justice Burgess Colabawalla and Justice Firdosh Pooniwalla, the department called the petition misconceived and urged the Court to dismiss it.
The affidavit was filed by Sandeep Dahiya, Principal Commissioner of Income-tax (Judicial). The department said that the petitioners were trying to use the Income Tax Act to challenge the legal meaning of marriage, wife, husband and spouse as understood under different marriage laws in India.
“The Petitioners are trying to use the Income Tax Act to challenge the meaning of ‘marriage/ wife-husband/ spouse’ as statutorily understood under different marriage acts and so applied under the Income Tax Act. This in my humble submission is not permissible. The Petitioners seek to get the benefit of ‘spouse’ under the Income Tax without first getting their relationship legally recognised as ‘marriage/ spouse/wife-husband.’ I say that under the Income Tax Act, no relationship will be recognised as marriage, wife-husband, spouse, if it is not so recognised under any of the marriage act in India. The Petitioners have not brought on record any law which recognises their relationship as marriage or spouse. Rather the petitioners are trying to submit that the Income Tax Act should give the definition of marriage/spouse/wife-husband contrary to their meaning/definition under different marriage act,”
The department further said that the petitioners have not challenged any specific action or order of the Income Tax authority. According to the department, in the absence of any order under challenge, the writ petition itself is not maintainable.
“The petition is misconceived. In the absence of any order under challenge, the petition is not maintainable as a Writ Petition. On this ground alone, the petition be dismissed,”
The petitioners, through counsel Dhruv Janssen-Sanghavi, have asked the Court to read same-sex couples into the proviso to Section 56(2)(x), so that they can also get the same gift-tax exemption that is available when gifts are exchanged between recognised spouses.
The matter also raises an important question about legal certainty. Tax exemptions are not based only on emotions, relationships or private arrangements. They depend on clear statutory recognition. If one relationship is given financial benefit without clear legal recognition, then tomorrow similar uncertainty can affect many others, including men facing matrimonial, property and family disputes where the words wife, husband, spouse and marriage carry serious legal and financial consequences.
This is why courts and tax authorities often insist on legally recognised relationships before granting benefits. In matrimonial and family-related laws, men already face major financial consequences through maintenance, alimony, property claims and criminal litigation. Any expansion of spouse-based benefits without a clear legislative framework can create further confusion and unequal burdens.
In November last year, the Bombay High Court had refused to grant any interim relief in the matter. The case was earlier listed for final hearing on July 9. However, on July 6, Additional Solicitor General Anil Singh sought further adjournment, stating that Solicitor General Tushar Mehta would appear for the Income Tax Department.
“We find that the above matter has been adjourned on several occasions at the instance of the Revenue. As a last chance, and considering that the Learned Solicitor General of India would be appearing in this matter, we place the above Writ Petition on board on 30th July, 2026 at 3:00 p.m. Considering that the counsel appearing for the Petitioners comes from out of India to address this Court, we have made it clear to the Revenue that no further adjournments will be granted,”
The Bombay High Court will now hear the matter on July 30, 2026.
EXPLANATORY TABLE OF LAWS / SECTIONS CONNECTED WITH THIS CASE
| LAW / SECTION | WHAT IT MEANS | RELEVANCE IN THIS CASE |
| Section 56(2)(x), Income Tax Act, 1961 | Taxes money, property or assets received without consideration if the value crosses the statutory limit, generally treated as income from other sources. | The same-sex couple is challenging the denial of gift-tax exemption available to recognised “spouses.” |
| Proviso to Section 56(2)(x), Income Tax Act | Exempts certain gifts received from specified relatives, including spouse. | The dispute is whether same-sex partners can be included within spouse-based exemption when same-sex marriage is not legally recognised in India. |
| Writ Petition | A constitutional remedy filed before a High Court seeking judicial review or constitutional relief. | The petitioners filed Writ Petition No. 3784 of 2025 before the Bombay High Court. |
| Ordinary Original Civil Jurisdiction | Jurisdiction of the Bombay High Court to hear certain civil matters directly at the first instance. | The order records that the petition is before the Bombay High Court under its Ordinary Original Civil Jurisdiction. |
| Marriage / Spouse Recognition Under Indian Marriage Laws | Indian marriage statutes presently recognise marriage in terms defined by law. | The Income Tax Department’s stand is that tax benefit as “spouse” cannot be claimed unless the relationship is first legally recognised as marriage or spouse. |
| Constitutional Challenge | A challenge alleging that a legal provision violates constitutional rights. | The petitioners have challenged the provision as indirectly discriminatory against same-sex couples. |
CASE DETAILS
| DETAIL | INFORMATION |
| Court | High Court of Judicature at Bombay |
| Jurisdiction | Ordinary Original Civil Jurisdiction |
| Case Title | Payio Ashihio vs Union of India & Ors. |
| Case Number | Writ Petition No. 3784 of 2025 |
| Petitioner | Payio Ashihio |
| Respondents | Union of India & Ors. |
| Bench | Justice B. P. Colabawalla and Justice Firdosh P. Pooniwalla |
| Date of Order | July 6, 2026 |
| Counsel for Petitioner | Dr. Dhruv Janssen Sanghavi through V.C., with Adv. Tejas Popat and Adv. Aanchal Maheshwari, instructed by Rashmikant and Partners |
| Counsel for Respondents | Adv. Anil C. Singh with Adv. Pavan Patil |
KEY TAKEAWAYS
- Spouse benefits cannot be treated casually.
The word “spouse” carries serious tax, property, maintenance and financial consequences. If marriage is not legally recognised, benefits linked to marriage cannot be expanded casually. - Legal recognition must come before financial entitlement.
Relationships may be personal, but tax exemptions are statutory benefits. Without clear legal backing, courts cannot allow emotional claims to override written law. - Men already suffer from unclear family-law interpretations.
In matrimonial disputes, one loose interpretation of “wife”, “spouse” or “relationship” can create lifelong financial liability for men through maintenance, alimony and property claims. - This case shows why gender-neutral clarity is necessary.
If law is expanded without Parliament clearly defining rights and liabilities, men may again become the default financial targets in future relationship disputes. - Bombay High Court was clear on delay.
The Court noted repeated adjournments by the Revenue and gave one last chance, fixing the matter for July 30, 2026, while warning that “no further adjournments will be granted.”
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