Bombay HC Notice To IT Dept, Attorney General On Same-Sex Couple’s Plea Challenging Gift Tax Exemption Denial

Mumbai: A same-sex couple has approached the Bombay High Court challenging the Income Tax Act’s differential treatment on the taxation of gifts between spouses.

Petition Seeks Constitutional Recognition of Same-Sex Spouses

The couple’s plea has sought that the term ‘spouse’ appearing in the explanation to the fifth proviso to Section 56(2)(x) of the Income Tax Act be declared as unconstitutional as it excludes the same sex couples from the scope and definition of the term ‘spouse’.

Under Section 56(2)(x) of the Income Tax Act, any money, property, or asset received without adequate consideration, valued at over Rs 50,000, is taxed as ‘income from other sources’.

However, the fifth proviso to the section exempts such gifts when received from ‘relatives’, including ‘spouses’. The term ‘spouse’ is not separately defined in the Act.

Court Issues Notice, Sets Hearing for 18 September

A bench of Justices B P Colabawalla and Firdosh Pooniwalla on August 14 said the plea challenges the constitutional validity of a provision of law and issued notice to the Attorney General of India.

“Since the constitutional validity is challenged, we issue notice to the Attorney General of India returnable on 18th September 2025,” the order said. The court has also issued notice to the Income Tax Department.

The court has kept the matter for hearing on September 18. The petition also sought a declaration extending the benefit of the fifth proviso to Section 56(2)(x) of the IT Act to the petitioners who claim to be in a long-term, stable same sex relationship.

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The plea further seeks to include same sex couples under the definition of ‘spouse’ in the provision. It adds that the sex couples who are in a long term and stable relationship are in the same position as heterosexual couples which would be presumed to be in a marriage.