Same-Sex Couples in India Are Fighting the Tax Code Because the Supreme Court Won't Touch Marriage
Two Bombay High Court petitions are asking India's tax authority to treat same-sex partners as spouses under a gift-tax exemption — a narrow, practical fight born out of the Supreme Court's 2023 refusal to legalize marriage equality.
When India’s Supreme Court declined to legalize same-sex marriage in 2023, it left same-sex couples locked out of the entire legal architecture built around the word “spouse” — inheritance, insurance nomination, hospital visitation, and, as two pending court cases are now testing, taxes. India’s Income Tax Department is fighting to keep it that way.
The case: a gift, a gold bracelet, and Section 56(2)(x)
At issue is the explanation to the fifth proviso of Section 56(2)(x) of India’s Income Tax Act, which exempts gifts between spouses — and a defined list of other relatives — from being counted as taxable income. Because the provision defines “relative” by reference to a person’s spouse, siblings, and other blood relations, same-sex partners fall outside it entirely: without legal marriage recognition, there’s no “spouse” category for them to qualify under.
Two petitioners, Paiyo Ashiho and Vivek Divan, have asked the Bombay High Court to read their long-term partnership into the fifth proviso’s protections. A parallel case, filed by Bengaluru-based engineers Anurag Kalia and Akhilesh Godi, centers on a considerably more concrete stake: Kalia wanted to give Godi a gold bracelet worth more than ₹115,500 (about $1,213), and without spousal recognition, that gift is taxable income for Godi rather than a tax-free transfer between partners. That case remains pending before the Karnataka High Court.
The Indian government’s position, laid out in an affidavit from the Prime Minister Narendra Modi-led administration, is that the petitions don’t hold up procedurally — that they don’t challenge any specific action or order by tax authorities, and that granting spousal tax treatment to people who aren’t legally married would go beyond what the Income Tax Act allows. The government called the Bombay petition an “abuse of process of law” and asked the court to dismiss it with costs, arguing the petitioners want the benefits of a “spouse” designation without the legal relationship to back it up.
The case returned to active hearings on July 6, when the Bombay High Court heard arguments with Solicitor General Tushar Mehta appearing for the government before Justices B.P. Colabawalla and Firdosh P. Pooniwalla.
Why this keeps happening in Indian courts
This is the pattern India’s LGBTQ+ rights movement has settled into since the Supreme Court’s 2023 ruling in Supriyo v. Union of India, which found a constitutional right to same-sex marriage but declined to order the government to create one, instead deferring to Parliament — which has shown no interest in taking up the issue. That left advocates to fight the practical consequences of non-recognition one institution at a time: insurance nomination rights, joint bank accounts, next-of-kin hospital status, and now the tax code.
According to an analysis by the Vidhi Centre for Legal Policy, at least 14 separate provisions across India’s direct tax code reference “spouse” in ways that could produce different treatment for same-sex couples — meaning even a favorable ruling in the Ashiho-Divan case would likely resolve only one piece of a much larger patchwork. Advocates see these cases less as a single decisive fight and more as an incremental strategy: establish spousal-adjacent recognition in narrow, specific contexts where courts might be more comfortable ruling than they were on marriage itself.
It’s a strategy with real precedent in India. Courts have previously extended protections to same-sex couples in areas like joint bank accounts and, in some states, next-of-kin hospital rights, even while marriage itself remains unresolved at the national level. Whether tax law becomes the next domain to bend that way is now in the hands of two high courts.
The bigger picture
India remains a country where being LGBTQ+ carries wide variation in lived experience depending on class, region, and family — decriminalized under Section 377 since 2018, culturally visible in ways many neighboring countries aren’t, but still without marriage, adoption, or now, potentially, straightforward gift-tax treatment for long-term partners. Cases like Kalia and Godi’s — a couple wanting to give each other a piece of jewelry without a tax penalty — make the abstraction of “marriage equality” concrete in a way court arguments about constitutional doctrine sometimes don’t.
There’s no ruling date yet in either case. But with the government fighting the petitions on procedural grounds rather than conceding any part of the underlying claim, both cases are likely headed toward substantive hearings on whether India’s tax code can keep defining “spouse” in a way that excludes same-sex couples entirely.
