A same sex couple has moved Bombay High Court challenging the Income Tax Act’s differential treatment on taxation of gifts between spouses. The plea filed by the couple sought to declare the term ‘spouse’ appearing in the explanation to the fifth proviso to Section 56(2)(x) of the Income Tax Act as unconstitutional as it excludes same sex couples from the scope of the term ‘spouse’.

Under 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 Act.

A bench of Justice B P Colabawalla and Justice Firdosh Pooniwalla on August 14 said the plea challenges the constitutional validity of a provision of law and issued notice to the Attorney General of India.