The Karnataka High Court is examining whether the exclusion of same-sex couples from spousal tax benefits under the Income Tax Act, 1961, amounts to unconstitutional discrimination. The case, heard before Justice B.M. Shyam Prasad, centres on a petition filed by Anurag Kalia and Akhilesh Godi, who challenge their ineligibility for the gift tax exemption available to married couples under Section 56(2)(x) of the Act.
The dispute arose from a gift of a 22-karat gold bracelet exchanged between the petitioners. Under existing tax law, gifts between spouses qualify for exemption, but same-sex partners are denied this benefit because Indian law does not recognize same-sex marriage. The petitioners contend this exclusion violates Article 15 of the Constitution, which prohibits discrimination on grounds including sex.
On October 9, 2026, Dr. Dhruv Janssen-Sanghavi argued for the petitioners that the challenge is fundamentally about equality. If the tax exemption exists to benefit spouses, and the Constitution forbids sex-based discrimination, then denying the benefit to same-sex couples contradicts constitutional guarantees of equal protection.
Centre argues for legislative route
The Union of India, represented by Additional Solicitor General K. Arvind Kamath, took a different position. The Centre argued that same-sex couples seeking recognition of spousal benefits should challenge the marriage laws themselves rather than attempt to expand the definition of 'spouse' in the Income Tax Act. This argument reflects a distinction between legislative and executive authority: the Centre contends that recognizing same-sex marriage is a matter for Parliament, not for courts reinterpreting existing tax statutes.
In support of this position, the Centre cited the Supreme Court's judgment in Supriyo v. Union of India, which addressed similar questions about same-sex recognition. That judgment established that recognizing same-sex marriage falls within the legislative domain, not the interpretive power of courts applying existing laws.
The Centre's strategy separates the constitutional question of equality from the structural question of which law requires change. Rather than conceding that Section 56(2)(x) discriminates and must be amended by courts, the Centre suggests the petitioners pursue legislative reform through Parliament or challenge the marriage laws that define who qualifies as a spouse.
Article 15 and substantive equality
Article 15 of the Constitution prohibits discrimination by the State on grounds of religion, race, caste, sex, or place of birth. The petitioners argue that denying tax benefits based on the sex of one's partner falls within this protection. The Centre's counterargument does not directly deny this; instead, it shifts the burden to the petitioners to first establish same-sex marriage in law before tax benefits can follow.
This approach raises a secondary question: whether a constitutional right to equality can be vindicated through tax law interpretation, or whether it requires prior legislative recognition of same-sex marriage. Indian courts have increasingly grappled with such questions, balancing institutional roles and constitutional mandates.
The petitioners' argument also draws on the principle of substantive equality—that formal neutrality in tax law may mask substantive discrimination when applied to couples excluded from the definition of spouse itself. If the law's purpose is to recognize and support spousal relationships, excluding same-sex couples from that recognition arguably thwarts the statute's own logic.
Decriminalization and its limits
The Indian legal system has witnessed evolving jurisprudence on LGBTQ+ rights. The decriminalization of consensual same-sex conduct under Section 377 of the Indian Penal Code, following the Supreme Court's decision in Navtej Singh Johar v. Union of India, marked a significant shift. However, that judgment explicitly left marriage and succession law untouched, noting that these matters require legislative intervention.
The current petition tests whether that boundary holds firm when a petitioner claims that excluding same-sex couples from a statutory benefit violates constitutional equality. The Centre's reliance on Supriyo v. Union of India suggests courts have already addressed this question, but the Karnataka High Court's willingness to hear detailed arguments indicates the matter remains contested.
The court's dilemma
Justice B.M. Shyam Prasad must decide whether Section 56(2)(x) can be read to include same-sex partners as 'spouses' through constitutional interpretation, or whether the definition of spouse is so tethered to marriage law that courts cannot expand it without legislative action. The decision will likely consider whether the Income Tax Act's silence on same-sex spouses constitutes intentional exclusion or merely reflects the Act's reliance on definitions established elsewhere in law.
A ruling in the petitioners' favour could require tax authorities to recognize same-sex couples as spouses for purposes of the exemption, potentially extending to other spousal benefits in tax law. A ruling against them would affirm that marriage law must change first before tax law can follow.
The Centre's argument, while pragmatic from an institutional perspective, may struggle if the court views equality rights as self-executing rather than contingent on prior legislative recognition. Conversely, the petitioners' argument assumes courts can redefine 'spouse' in a taxing statute, a power the Centre contests.
The matter is posted for further hearing on October 12, 2026. The court has not yet issued any ruling on the constitutional contentions raised. Additional arguments or evidence may be presented at the next hearing. The court may also seek clarification on how other statutes define spouse, whether any administrative guidance exists, and whether the Income Tax Department has encountered similar claims.
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