The Income Tax Department opposes a same-sex couple’s plea to exempt gifts from tax

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The Income Tax Department has filed an affidavit in the Bombay High Court against a suit by a same-sex couple challenging Section 56(2)(a). (x) of the Income Tax Act, which provides exemption from tax on gifts between spouses and seeks to extend the benefits to their relationship.

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An affidavit dated October 14, 2025 was filed by Sandeep Dahiya, Principal Commissioner of Income Tax (Judicial) before the Division Bench of Burgess Colabawalla and Firdosh Pooniwalla. The ministry urged the bench to dismiss the petition as “misconceived”. According to the ministry, the petitioners are trying to use the Income Tax Act to change the statutory meaning of ‘spouse’, a term not recognized in India for same-sex relationships under any marriage law. The ministry said the petitioners did not cite any law recognizing their relationship as a marriage or recognizing them as spouses, and are instead asking the Income Tax Act to provide a definition of marriage or spouse that conflicts with the definitions under the various marriage laws.

The department argued that the suit was an abuse of legal process because the relief sought did not relate to the provisions of the Income Tax Act. The affidavit further stated that marriages or conjugal relations between same-sex couples are not recognized by any marriage law in India and therefore the exemption under Section 56(2)(a) cannot be extended to them. x). The Ministry contends that the interpretation of the term “husband/wife” must be in accordance with the marriage laws of India and that the Income Tax Act cannot define the term in conflict with those laws.

The Department argued that the petitioners were seeking to change the definition of “spouse” under the Income Tax Act without the supporting legislation recognizing their relationship as a marriage. He further submitted that the proposal is an abuse of legal process as the relief sought has no nexus with the provisions of the Income Tax Act. The ministry urged the court to dismiss the suit, reiterating that the spousal gift exemption applies only to relationships that are considered marriages under Indian law. The court has not yet ruled on this matter.

Published – 9 Jul 2026 15:58 IST