Bombay HC Issues Notice On Plea By Same-Sex Couple Seeking Inclusion Under Definition Of 'Spouse' For Tax Exemption U/s 56(2)(x) Of IT Act

The Bombay High Court has issued a notice to the Attorney General of India on a petition filed by a 'same sex couple' challenging the constitutional validity of Section 56(2)(x) of the Income Tax (IT) Act, which grants exemption from tax on gifts between heterosexual couples. 

A division bench Justices Burgess Colabawalla and Firdosh Pooniwalla has sought to know the stance of the Union Government on the petition filed by Payio Ashiho and his partner Vivek Divan, both of whom have urged the bench to include 'same sex couples' in the proviso to section 56(2)(x), which provides exemptions to heterosexual couples. 

"This Writ Petition is filed to declare and hold that the term 'spouse' appearing in the explanation to the fifth proviso to Section 56(2)(x) as unconstitutional inasmuch as it excludes the Petitioners from the scope and definition of the term 'spouse'. The declaration is also sought to extend the benefit of the fifth proviso to Section 56(2)(x) of the IT Act to the Petitioners who are in a long-term, stable same sex relationship," the judges recorded in the order passed on August 14.

In the alternative to prayer clause (a), the judges noted that the relief is sought that the term 'spouse' as used in the fifth proviso to Section 56(2)(x) of the IT Act be read to include same sex couples like the Petitioners, and who according to the Petitioners, are in exactly the same position as heterosexual couples which would be presumed to be in a marriage.

"Since the constitutional validity is challenged, we issue notice to the Attorney General of India returnable on 18th September 2025. We also direct the registry to issue notice to Respondent No.2, returnable on September 18, 2025," the judges ordered. 

Notably, Section 56(2)(x) of the IT Act taxes any money, property, or any other assets received if their value exceeds Rs 50,000. These 'receipts' or 'gifts' under the law are categorised as 'income from other sources.' But the fifth proviso to this provision exempts from taxation, such gifts when received from 'relation' including 'spouses.'

This very part of the proviso, the petitioners allege is 'discriminatory' against the same sex couples as it does not explain if the same would apply to such couples as the law does not recognise same sex partners as 'spouses.'

The bench is likely to hear the matter on September 18.

Case Title: Payio Ashiho vs Union of India [Writ Petition (Lodging) 24345 of 2025]

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