The Karnataka High Court has requested the Union government to respond to a petition challenging tax exemptions for gifts between spouses, which currently excludes LGBTQ+ couples from the benefit as their marriages are not legally recognised in India. According to reports from The Economic Times, Justice B Shyam Prasad issued the notice while hearing the case, with the matter now scheduled for further hearing on July 15, 2026. The petition was filed by Bengaluru-based software engineers and IIT alumni Anurag and Akhilesh, who have been living together for the past seven years.
The issue stems from a 15-gram gold bracelet valued at more than ₹1 lakh that Akhilesh gifted to Anurag. As reported by The Economic Times, the couple disclosed this in their respective income tax returns (ITRs), but unlike gifts exchanged between legally recognised spouses, it was treated as taxable because the exemption available for gifts received from a 'relative' does not extend to same-sex partners under the current law. According to Section 56(2)(x) of the Income-tax Act, any money or property worth more than ₹50,000 received without consideration is taxed as 'income from other sources', while gifts received from specified 'relatives' such as parents, spouse and siblings are exempt from tax. The definition of 'relative' includes the 'spouse of an individual', which effectively excludes same-sex couples from the tax exemption.
The petitioners argue that the income tax law discriminates against same-sex couples by denying them the same tax exemption available to married heterosexual couples, in violation of Articles 14 and 15 of the Constitution, which guarantee equality before the law and prohibit discrimination. According to the plea, same-sex couples in long-term relationships should be treated on par with married heterosexual couples for the purpose of tax exemptions. The couple has specifically challenged the constitutional validity of the provision in the Income-tax Act, 1961, that exempts gifts exchanged between spouses from taxation while effectively excluding same-sex couples from the same benefit.
To support their case, the petitioners have cited previous Supreme Court rulings, including the Shiramabai vs OIC Records judgment, which held that long-term cohabitation gives rise to a strong legal presumption of a valid marriage. As reported by The Economic Times, they argue that the principle should also guide the interpretation of tax benefits for couples in long-term same-sex relationships. The petition contents that excluding same-sex partners from the definition of 'spouse' under the Income-tax Act results in unequal treatment and asks the court to declare the provision unconstitutional.
