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India Today
2 days ago
- Politics
- India Today
Claiming discrimination, same-sex couple approaches court over uneven tax: Report
A same-sex couple has approached the Bombay High Court challenging a provision in the Income Tax Act that they say discriminates against them by taxing gifts exchanged between partners, reported The Economic petition was admitted by a bench of Justice BP Colabawalla and Justice Firdoush Pooniwalla, which has also issued a notice to the Attorney General as the case raises a constitutional petitioners, Payio Ashiho, a homemaker, and his partner Vivek Divan, a lawyer who has practised at the High Court and worked at the United Nations headquarters, argue that the current law provides unequal economic treatment to same-sex couples compared to heterosexual couples. They are represented by Advocate Dr Dhruv Section 56(2)(x) of the Income Tax Act, any money, property, or asset received without adequate consideration, valued at over Rs 50,000, is taxed as 'income from other sources'. However, the fifth proviso to the section exempts such gifts when received from 'relatives', including 'spouses'. The term 'spouse' is not separately defined in the heterosexual couples, even those not formally married but presumed to be in a marriage, such gifts are not taxed, as they can legally marry. Same-sex couples cannot claim the same exemption as they are not legally recognised as spouses in petitioners have asked the court to declare the reference to 'spouse' unconstitutional to the extent that it excludes same-sex couples, to make the proviso applicable to same-sex couples in long-term stable relationships, and to restrain tax authorities from reassessment or penalties on transactions between them. They clarified that they are not seeking recognition or presumption of case is seen as significant for the LGBTQIA+ community as it could affect investments, property ownership, and inheritance rights. While the Supreme Court decriminalised same-sex relationships in 2018, it declined to recognise same-sex marriages under the Special Marriage Act in experts say the case hinges on whether the court will give an expansive reading to the word 'spouse'. Ashish K Singh, managing partner of Capstone Legal, told The Economic Times that for the petitioners' plea to succeed, the court would need to interpret 'spouse' more broadly.'However, the biggest bottleneck would be the fact that no legal provision in India recognises the rights of same-sex couples,' Singh said.- Ends advertisement
Economic Times
2 days ago
- Politics
- Economic Times
Same-sex couple moves court against Income Tax Act
A same-sex couple has challenged a discriminatory tax law in Bombay High Court. The couple argues that the law unfairly taxes gifts between same-sex partners. Heterosexual couples do not face this tax burden. The petitioners claim this violates constitutional rights. The court admitted the petition and will notify the Attorney General. The LGBTQIA+ community is closely watching the case. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads 'The love that dare not speak its name' spoke up against an 'uneven' tax code on Thursday morning at Room number 6 of the Bombay High Court, a theatre of many epic legal battles. A same-sex couple, in a relationship for years, has moved the court, challenging the law that discriminates against them by taxing the gifts received by one partner from the Income Tax Act, no such tax on gifts is levied for a heterosexual couple, even if the partners are not formally married but are presumed to be in a marriage. They are not taxed simply because they have the possibility of getting to the petitioners, such unequal economic treatment to same-sex couples, who may be in a long, stable relationship, would amount to a denial of the equal protection of the law on the basis of sex --- a form of discrimination prohibited by Articles 14 and 15 of the Constitution of the petition, the bench comprising Justice and Firdoush Pooniwalla said the court would send a notice to the Attorney General as it raises a constitutional petitioners, Payio Ashiho, a homemaker, and his partner Vivek Divan, a lawyer who had practised at the High Court and worked at the UN headquarters, were represented by Advocate Dr Dhruv to curb tax evasion, Section 56(2)(x) of the IT Act taxes any money, property, or other assets received without adequate consideration if their value exceeds Rs 50,000. Such receipts or gifts are categorised as 'income from other sources'. However, as per the fifth proviso to Section 56(2)(x), such gifts are not treated as 'income from other sources' and therefore not taxed, when received from 'relatives', which also includes 'spouses' (a term that the statute does not separately explain).Unlike the partners in a heterosexual couple, the petitioners are unable to claim tax benefit as they would not legally qualify as 'spouses' as they belong to the same petition challenges the constitutional validity of the explanation to the fifth proviso to Section 56(2)(x) of the Act, insofar as it discriminates against same-sex couples in taxing gifts received from one partner to petitioners have prayed before the court, (1) to declare the reference to the term 'spouse' as unconstitutional in so far as it excludes same-sex couples in the same circumstances; (2) to declare that the particular proviso is applicable to same-sex couples in a long, stable relationship; (3) restrain tax authorities from carrying out reassessment and imposing penalties relating to transactions between the petitioners. It may be pointed out that the petitioners neither seek recognition nor presumption of outcome of the proceedings, according to legal circles, would be closely followed by the LGBTQIA+ community as it could have a bearing on investments, property ownerships, and some legal victories, community members, often voicing the discriminations they encounter, believe they still have a long way to go in preserving their dignity and freedom. While in 2018, the apex court had decriminalised same-sex relationship by scrapping a colonial era law, in 2023, a five-member Supreme Court bench declined to recognise LGBTQIA+ persons' right to marry under the Special Marriage Act, K Singh, managing partner of law firm Capstone Legal said For such a prayer to be granted, an expansive reading of the word 'spouse' is required to be considered by the Court.'However, the biggest bottleneck would be the fact that no legal provision in India recognises the rights of same sex couples,' said Singh.
