Same-sex couple’s tax plea: Karnataka HC examines exemption on gifts between partners

Mangalore Today News Network

New Delhi, Sep 24, 2026: The Central government’s opposition to a plea by a same-sex couple before the Karnataka High Court seeking an income-tax exemption on gifts exchanged between them raises questions about equality and the scope of existing tax laws.

The case concerns a same-sex couple from Bengaluru who have reportedly lived together for more than seven years and jointly own a house. They have approached the court seeking to declare the definition of “spouse” under the Income Tax Act unconstitutional. The immediate issue involves a gold bracelet gifted by one partner to the other. Since the Income Tax Act does not recognise them as spouses, the gift is treated as “income from other sources” and is therefore taxable.

The government has argued that the exemption under Section 56(2)(x) of the Income Tax Act is available only for gifts received from legally recognised relatives, including a spouse. Since Parliament has not legally recognised same-sex marriage, the government maintains that the two men cannot claim the status of spouses for the purpose of the exemption.

The petitioners, however, have challenged this interpretation, arguing that the provision discriminates against them on the basis of sex and violates their fundamental rights under Articles 14 and 15 of the Constitution, as well as Articles 19(1)(a) and 21. They contend that taxing a gift exchanged between long-term partners amounts to taxing an expression of affection.

The petitioners argue that the concept of “relative” under the tax law should take into account changing social realities. They point out that the law extends certain tax benefits to family relationships and contend that couples who have shared a household and maintained a long-term partnership should not be excluded solely because their relationship is not recognised as a marriage.

A similar petition was filed before the Bombay High Court last year by another same-sex couple seeking an income-tax exemption on a gift exchanged between them.

The case raises a broader legal question about how tax provisions dealing with family relationships should apply as social and legal understandings of relationships evolve. While the government has maintained that any change to the existing legal framework must come through Parliament, the Karnataka High Court will have to consider the constitutional challenges raised by the petitioners.