Overview
- In early July 2026 the Bombay High Court moved the final hearing to July 30 after the Income Tax Department sought more time and the bench warned no further adjournments would be allowed.
- The Karnataka High Court has asked the Central Government to respond and limited its question to whether courts can judicially enlarge the undefined term “spouse” in Section 56(2)(x) of the Income Tax Act.
- The Income Tax Department, in an October 14, 2025 affidavit, argued the Bombay petition is misconceived because petitioners have not challenged any tax order and said tax law follows marriage laws so unrecognised unions cannot claim spousal exemptions.
- The Karnataka case arose from a 22‑carat gold bracelet valued at about Rs 1,15,500 that a tax adviser said must be valued, reported as income, and taxed at the applicable rate plus surcharge and cess, a concrete example petitioners say shows unequal treatment.
- A decision for petitioners would grant targeted tax relief and raise whether courts can rewrite a fiscal term to prevent sex‑based discrimination under Articles 14 and 15, while a ruling against them would leave changes to Parliament and could limit judicial fixes in tax statutes.