Same-Sex Partners Can't Claim 'Spouse' Tax Benefits Without Marriage Recognition: Centre Tells Karnataka High Court
The Central Government has opposed a plea by a same-sex couple before the Karnataka High Court seeking to avail the Income Tax Act's exemption on gifts received from a 'relative', submitting that the benefit available to a 'spouse' cannot be extended to same-sex partners without recognising their relationship as a legally valid marriage.The petitioners have challenged the constitutional...
The Central Government has opposed a plea by a same-sex couple before the Karnataka High Court seeking to avail the Income Tax Act's exemption on gifts received from a 'relative', submitting that the benefit available to a 'spouse' cannot be extended to same-sex partners without recognising their relationship as a legally valid marriage.
The petitioners have challenged the constitutional validity of the expression 'spouse' under the Fifth Proviso to Section 56(2)(x) of the Income Tax Act, 1961, insofar as it excludes same-sex partners, and have sought a declaration that the exemption should equally apply to them despite not being married.
The case arose from a 22-karat gold bracelet, stated to be a family heirloom, allegedly gifted by one partner to the other on their relationship anniversary. The petitioners contend that the gift would have been exempt from tax had they been a married heterosexual couple.
Solicitor General Tushar Mehta however submitted before Justice B M Shyam Prasad that the expression 'spouse' in Section 56(2)(x) is to be understood alongside Section 2(41) of the Income Tax Act, which defines 'relative'. The provision includes husband or wife, apart from specified other relationships.
According to SG, while Section 56 uses the consolidated expression 'spouse' rather than separately using the expressions husband and wife, the term has to be understood in the context of the statutory scheme.
He submitted:
“My submission would be that spouse under Section 56 of the Act would take colour from the definition of relative under Section 2(41), it's a term to include both husband and wife.”
According to the Centre, giving 'spouse' a meaning beyond the relationship contemplated by the statutory scheme could have consequences for other provisions of the Income Tax Act where the expressions 'relative' and 'spouse' are used.
The Union further argued that the petition essentially seeks recognition of a same-sex matrimonial relationship, which, according to its submission, cannot be achieved through judicial interpretation of the Income Tax Act.
Relying on the Supreme Court's decision in Supriyo v Union of India, the SG submitted that the question of conferring legal recognition on same-sex marriage had been left to the legislature. He argued that allowing the petition would result in judicially recognising a matrimonial relationship between two persons of the same sex.
The SG also referred to the concurring opinion of Justice Narasimha in Supriyo, submitting that a positive right or entitlement carrying statutory benefits cannot simply be created by reading additional categories into an existing provision.
The Centre illustrated its argument by referring to an unmarried heterosexual couple. It submitted that even where a man and woman live together for a long period, they would not automatically be treated as spouses merely because of their relationship.
According to the SG, this demonstrates that the classification is based on marital status rather than sexual orientation.
The Union also argued that marriage has legal consequences extending beyond the relationship between two individuals. The SG referred to provisions concerning succession and other statutory rights to submit that several areas of Indian law operate on the basis of the legal status of a person as a married man or woman.
He submitted that extending the expression 'spouse' to same-sex relationships under the Income Tax Act could have consequences beyond the tax provision itself, including in statutes dealing with succession, adoption and maintenance.
The SG also submitted that the Income Tax Act proceeds on the principle that income is taxable unless a specific exemption applies. Section 56 deals with income from 'other sources', while the Fifth Proviso creates an exception for certain sums received from a 'relative'. He cautioned that expanding the exemption beyond the statutory categories could potentially create avenues for tax avoidance.
Responding to the petitioners' challenge under Article 14 of the Constitution, the SG submitted that marriage constitutes a valid basis for legislative classification where there is an intelligible differentia and a rational nexus with the object of the legislation.
The Court then queried the use of the term 'spouse' in other statutes, including the Bharatiya Nyaya Sanhita.
The SG maintained that the underlying concept remained a spousal relationship arising from a legally recognisable marriage. He submitted that extending the term to other relationships could lead to statutory consequences which, according to the Union, were not contemplated by the legislature.
The SG clarified that the Union was not suggesting that two persons of the same sex cannot live together, but that the statutory rights and benefits available under a particular legislation depend upon the legal categories recognised by that legislation.
The petitioners, represented by advocates Varshitha K and Dr Dhruv Janssen Sanghavi, have sought a declaration that the tax benefit under the Fifth Proviso to Section 56(2)(x) should equally apply to persons in a long-term, stable same-sex relationship.
In the alternative, they have sought a direction to read same-sex couples into the expression 'spouse' where they are in circumstances comparable to heterosexual couples who may be presumed to be in a marriage.
Case Title: Anurag Kalia & Anr. v. Union of India & Anr.
Case Number: WP No. 28761/2025