When Aisha and Meera walked under a canopy of marigolds in a quiet Delhi farmhouse this spring, their friends cheered, their parents wiped away tears, and a pundit chanted the same Vedic verses he would use for any heterosexual couple. No statute in India records their union, but in every way that matters to the heart, they were married. Guests pressed velvet-covered envelopes into the couple’s palms, jewellery boxes clinked open, and the evening overflowed with the generosity that traditionally surrounds a North-Indian wedding.
Yet before the last lamp had been extinguished, Aisha’s chartered-accountant brother was already worrying aloud: “All the big cheques from your college friends—do you realise the tax department can treat every rupee as income?” His warning landed like a sudden chill in the warm night air.
That chill exists because India’s tax code still refuses to imagine a rainbow. Section 56(2)(x) of the Income-tax Act taxes any gift worth more than ₹50,000 received from a non-relative, unless the law grants a specific exemption. One of those exemptions is gifts “on the occasion of the marriage of the individual.” For Aisha and Meera the phrase is a dead letter: the State does not concede that a marriage took place, so the shield never rises. The same cheque that would be tax-free for a heterosexual bride becomes fully taxable for them—every paisa, not just the amount above the threshold.
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The rule applies equally to gold ornaments, a car, or land; even if their parents place the gift deed inside the decorated coconut basket, the tax office sees only “income from other sources.”
None of this would matter if Parliament had acted after the Supreme Court’s October 17 2023 verdict on marriage equality. In that decision, a five-judge bench acknowledged the dignity of queer lives but refused to read a gender-neutral meaning into the Special Marriage Act, telling campaigners to seek relief from lawmakers instead.
More than a year later, on 9 January 2025, the Court dismissed the last curative petitions, and the Centre still had no bill, no white paper, not even a consultative note.
Approximately 38 countries currently allow same-sex marriage. These include nations like the Netherlands, Belgium, Canada, Denmark, and South Africa, as well as countries in South America, Europe, and Oceania. The legalization of same-sex marriage has also been achieved through both legislative action and court decisions in various countries. Even the Vatican has moved faster on recognising same-sex unions, but India’s legislature has greeted its own citizens with silence.
The fiscal fallout is immediate. Aisha’s aunt counts as a “relative” under the Act, so her emerald necklace escapes tax. But Meera’s school friend Rohan is not a relative; the ₹1 lakh he gives the couple must be reported in one of their returns and is taxed at their highest slab. Should they pool the cash in a fixed deposit, the interest will be taxable year after year; if they invest in a flat and later earn rent, that rent is taxable, too.
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It is a double bind: they pay for the privilege of being told their marriage does not exist.
Could the Centre fix the problem without waiting for a broad marriage law? Yes, and overnight. A Central Board of Direct Taxes ( CBDT ) circular could declare that, pending legislation, gifts received at any ceremony “evidencing a committed union” enjoy the same exemption that heterosexual weddings do. Failing that, a one-line amendment to Rule 11U could exclude such gifts from valuation. Neither step needs a constitutional amendment; both require only political will. Yet the government stands motionless, content to collect revenue from love while talking about “traditional values” at press conferences.
Until the law changes, advisers urge queer couples to play defence. Channel as many gifts as possible through parents or siblings—relatives in the Act’s narrow sense—to exploit the family exemption. Execute formal gift deeds that say “without consideration” and keep donor identity proof, in case a future assessment demands explanations.
For high-value property, explore trust structures so that the gift is parked in a vehicle whose income can be distributed tax-efficiently. These tactics reduce the bite, but they also underscore the absurdity: heterosexual families need no such contortions to celebrate a wedding.
Until Parliament stops dithering, every rainbow ceremony will come with a grey tax bill, and every paid-up assessment will be a reminder that the freedom to love in India still costs extra.
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