The Bombay High Court has taken a significant step in a matter concerning equal tax treatment for same-sex couples. A division bench comprising Justice Burgess Colabawalla and Justice Firdosh Pooniwalla has issued notice to the Attorney General of India on a petition challenging the constitutional validity of Section 56(2)(x) of the Income Tax Act, 1961.
The petitioners, Payio Ashiho and Vivek Divan, a same-sex couple, have approached the court seeking inclusion under the definition of “spouse” for the purpose of availing exemption from gift tax. At present, Section 56(2)(x) exempts gifts exchanged between “relatives,” including spouses, but the benefit is effectively limited to heterosexual couples, thereby excluding same-sex partners.
The couple contends that this exclusion amounts to discrimination on the grounds of sexual orientation, violating their fundamental rights under the Constitution. They have urged the court to interpret the proviso to Section 56(2)(x) in a gender-neutral manner, ensuring that same-sex partners receive the same exemptions as heterosexual spouses.
The court has now sought the Union Government’s stance on this issue. The matter represents another chapter in the ongoing debate over legal recognition of same-sex relationships in India, particularly in the realm of tax and financial rights.
🔑 Key Takeaways
- Section 56(2)(x) of the Income Tax Act exempts gifts exchanged between “relatives,” including spouses – but in practice, this applies only to heterosexual couples.
- Petitioners Payio Ashiho and Vivek Divan, a same-sex couple, argue that excluding them is discriminatory and violates constitutional rights.
- The Bombay High Court has issued notice to the Attorney General of India, seeking the Union Government’s response.
- The plea calls for a gender-neutral interpretation of the law so that same-sex couples can also benefit from tax exemptions on gifts.
-
The case could set an important precedent for LGBTQ+ financial and tax rights in India.