INDIA Law and Practice Contributed by: Rishabh Shroff, Kunal Savani and Chirag Shah, Cyril Amarchand Mangaldas
the amount of donations made by them, thereby reducing their taxable income. The deduction can be claimed up to a maximum of 50% or 100% of the donated amount, depending on the institution or fund to which the donation has been made. The ITA 2025 has simplified and reorganised the exist- ing tax laws with respect to trusts, without introducing substantial changes. The revisions primarily stream- line provisions, ensuring better clarity while maintain- ing the existing framework. Accordingly, the ITA 2025 retains the fundamental classifications of revocable and irrevocable trusts, as well as determinate and indeterminate trusts. Further, the ITA 2025 would continue to exempt trusts at the time of settlement of assets, where such trust has been created by an individual for the sole benefit of their relatives. Hence, the existing estate planning structures and family offices established would con- tinue to be taxed in the same manner – ie, the income of determinate trusts would be taxed in like manner and to the same extent in the hands of the beneficiar- ies, and the income of discretionary trusts would be taxed at the MMR. 11. Planning for Non-Traditional Families 11.1 Succession Rights and Estate Taxes for Non-Traditional Families Indian law does not recognise same-sex marriage. The Supreme Court in Supriyo @ Supriya Chakraborty v Union of India (2023) declined to grant marriage equality, leaving same-sex couples without spousal status. Consequently, same-sex partners have no automatic succession rights under any personal law (Hindu, Muslim, Christian, or Parsi succession acts). A same-sex partner can only inherit if explicitly named as a beneficiary in a valid will. Similarly, civil partnerships/live-in relationships are not statutorily recognised in India (except in the state of Uttarakhand since February 2024). However, the courts have recognised the rights of adults to live together consensually by opining that applicable law creates a presumption in favour of marriage and
against concubinage when long-term cohabitation has taken place between the couple over an extended period of time and renders such a partnership as akin to marriage. The Uttarakhand UCC, while recognising live-in rela- tionships, makes it obligatory for a man and woman, who are living in the state of Uttarakhand, regardless of whether they are residents of Uttarakhand or not, to submit a “statement of the live-in relationship” to the appointed official for registration. Children born from such live-in relationships are considered as legiti- mate, and such children will enjoy the same rights and benefits as they would from legally wedded parents. Uttarakhand UCC also mandates payment of main- tenance, similar to marriage, in case the woman is deserted by her partner in a live-in relationship. Under prevalent Hindu personal laws in India, there is no differential treatment for children born out of wed- lock, adopted children, surrogate children or posthu- mously conceived children. Such children are regard- ed as Class I heirs of the deceased and therefore are not subjected to any disparity as far as inheritance to the estate of the deceased is concerned. Under the Hindu Adoption Act, 1956, from the date of adoption, the child is under the legal guardianship of the new adopted parent(s) and thus should enjoy all the benefits from those family ties. This also means that this child, therefore, is cut off from all legal ben- efits (eg, property and inheritance) from the family who had given them up for adoption. 11.2 Conflicts and Divergent Laws Similar to other commonwealth countries, India’s pri- vate international law principles are largely judicially developed rather than codified, creating uncertainty in cross-border holding and transfer of assets as well as succession. Foreign divorce decrees may not be recognised in India unless parties were domiciled in that jurisdic- tion. In such cases, Indian courts apply principles of comity and recognise foreign decrees where proper jurisdiction existed, natural justice was followed, and the decree is not contrary to Indian public policy.
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