A Bengaluru couple’s challenge is putting same-sex partners and spouse tax benefits under the spotlight, after the Centre told the Karnataka High Court that exemptions under India’s Income Tax Act depend on legally recognised marriage. The case matters because an ordinary family gift can become taxable when the law doesn’t recognise the relationship behind it.

Essential Takeaways

  • The dispute: A Bengaluru couple is challenging their exclusion from a tax exemption for gifts between specified relatives.
  • The gift involved: A 22-carat gold bracelet weighing 14.41 grams and valued at Rs 1,15,500.
  • The Centre’s position: The word “spouse” refers to a legally identifiable marriage, not simply a long-term partnership.
  • The constitutional question: The petitioners say the exclusion may breach equal-treatment guarantees under Articles 14 and 15.
  • Why it matters: The ruling could clarify how tax law treats same-sex partners where marriage recognition is absent.

A family gift has become a constitutional test

At the centre of the case is a gold bracelet, but the legal question is much larger. According to the Indian Express, the jewellery was a family heirloom that Akhilesh Godi had received from his father before giving it to his partner, Anurag Kalia.

Under Section 56(2)(x) of the Income Tax Act, certain gifts received without payment can be treated as income from other sources. Gifts from specified relatives are excluded, however, and the list includes a spouse. LiveLaw reported that the couple argues the same transfer would have received favourable treatment if they had been legally recognised as spouses.

That makes the dispute unusually concrete. This isn't an abstract debate about tax categories; it's about whether a personal gift between two people in a committed relationship should be treated differently because the law does not recognise their partnership as a marriage.

Why the Centre says “spouse” needs a legal boundary

The Centre has argued that the exemption isn't based on the recipients' sex. Instead, it says the provision relies on relationships that tax officials can identify and verify, such as marriage and specified blood relationships, as reported by LiveLaw Biz.

That approach reflects a familiar administrative concern. Tax rules need clear tests, and officials generally can't be expected to investigate the depth, duration or stability of every personal relationship before deciding whether an exemption applies. A marriage certificate, the government argues, offers a straightforward legal marker.

During the hearing, Justice B M Shyam Prasad also raised concerns about uncertainty if the court expanded the provision to cover relationships that aren't recognised elsewhere in law. LawChakra reported that the Centre's position is that extending the benefit could indirectly move towards recognising same-sex marriage through tax interpretation.

The couple says equal treatment doesn't require marriage recognition

Kalia and Godi have made a narrower argument. They have told the court that they aren't asking it to recognise their relationship as a marriage, according to Moneycontrol. Their challenge focuses on the tax consequence of using “spouse” in a way that excludes same-sex couples.

The petitioners say the underlying transaction is identical to a gift exchanged between heterosexual spouses. Both couples could share a home, manage finances and transfer personal property, yet only one would automatically qualify for the exemption. That difference, they argue, raises questions under Articles 14 and 15 of the Constitution.

The couple, both software engineers and IIT alumni, have lived together in Bengaluru since 2019 and jointly own a house, according to details reported by the Indian Express. Those facts give the case a distinctly everyday feel: the law is being asked to account for a household that already functions like many others, even if its legal status remains different.

What the tax rule means in practical terms

For taxpayers, the immediate lesson is simple but important: a partner isn't automatically a “relative” for every income tax exemption. LiveMint explained that gifts which fall outside the specified categories may be assessed under the rules for income from other sources, depending on the nature and value of the transfer.

Anyone considering a significant gift should keep records of its value, ownership history and transfer date. Jewellery and other valuable assets can raise questions about valuation, and a family heirloom may still need careful documentation when it changes hands.

Professional tax advice is particularly sensible for unmarried couples, including same-sex partners. The safest assumption is not that a long-term relationship will qualify for a spouse-based exemption, but that the specific statutory wording must be checked before the transfer is made.

The ruling could shape a wider legal conversation

The Karnataka High Court is continuing to hear the constitutional challenge. The case doesn't ask the court to settle every question surrounding same-sex relationships, but it could show how far existing laws can be interpreted when social reality moves faster than statutory language.

The tension is clear. The Centre wants predictable rules that tax authorities can apply consistently, while the petitioners say formal categories shouldn't produce unequal treatment where the economic transaction is the same. As LiveLaw reported, the court is therefore weighing both constitutional equality and the limits of judicial interpretation.

For couples watching from the sidelines, the issue is about more than one bracelet or one line in a tax form. It is about whether everyday financial decisions can be treated fairly when the legal system recognises their relationship unevenly.

A small gift can expose a very large gap between personal life and legal status.

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