scorecardresearchYour Questions Answered: Applying for a home loan as a same sex couple,

Your Questions Answered: Applying for a home loan as a same sex couple, and avenues of health insurance for transgenders

Updated: 18 Jun 2022, 02:48 PM IST

We answers some of your most pressing personal finance questions. It is time to make the most of your money!

Supreme Court in India, in its historical decision in September 2018, decriminalised homosexuality.

Supreme Court in India, in its historical decision in September 2018, decriminalised homosexuality.

Q1. We are same sex couple and want to open a bank account jointly. We wish to start investing to secure our future. How can we go about doing the same?

Supreme Court in India, in its historical decision in September 2018, decriminalised homosexuality. This has helped many individuals break free and come out to society, to their near and dear ones. For many LGBTQIA+ couples, the question remains on how to go about their finances and investments, since same-sex marriages are still not legalised in India.

Be aware of your rights in regards to bank accounts and other financial investments.

Bank Accounts: There is no restriction on opening a bank account. One can open a joint account with their partner, so long as both the partners can provide the required KYC documents. RBI does not discriminate between genders in terms of account opening and operating. You can also apply for debit cards / credit cards.

Investments: Mutual Funds also accept applications in joint holding if you can provide with the KYC documents. Ensure smooth transition/succession, the couple can go ahead with Mode of Operations – “either or survivor”.

Q2. I am a member of LGBTQ community and wish to change my gender through surgery in future. I work with a leading corporation. Can I apply for health insurance?

One is legally allowed to change their gender through surgery in India. However, if you wish to take the benefit of your health insurance policy, please check with the insurance company on the terms and conditions and whether such surgeries would be covered in the insurance plan or not.

Progressive companies sometimes do include such surgeries in their group insurance policies, to support inclusivity. Such corporate plans are customised and specific to organisations. Transgender individuals are offered group insurance benefits that include such surgeries.

Unfortunately, in India, individual policies still do not cover such surgeries. Talking about corporate group insurances, often the gender affirmation or reassignment surgeries are excluded.

You can check with your HR about whether the surgeries are included in the group insurance policies.

READ MORE: What are the medical insurance policies for transgender people? Details here

Q3. As a member of LGBTQIA+ community, can I appoint my partner as my nominee in my investments?

While for certain investments you can appoint your partner as your nominee, you need to keep in mind that a nominee is only a custodian of the financial instrument. They can be the receiver of the assets but not the keepers. A nominee is not necessarily a legal heir, and the battle for inheritance can turn ugly.

Unfortunately, while applying for life insurance, you cannot have your partner as the nominee. You cannot have a health insurance floater policy with your partner either. But, if you have adopted a child, they can be covered under floater policies in health insurance.

Though severely underrated, creation of a will becomes incredibly important and necessary when you belong to the LGBTQIA+ community and want to pass on your inheritance to your partner. One of the major reasons is that Hindu Succession Act, 1956, Indian Succession Act, 1925 and Muslim Laws recognise only males and females as subject matters of inheritance. Transgender people recognise themselves as females and can claim rights only through that medium. This criteria of inheritance from family property are violative of Article 15 of the Indian Constitution that prohibits discrimination on grounds of sex. Hence an easier way out of legal hassles is writing of a will.

Considering this fact, if you want to pass on the inheritance to your partner, while you mention their name as your nominee, also make a will and mention them as the beneficiary for inheritance of your assets. This is the only protection your partner has against other legal heirs.

Q4. We are a same-sex couple. We wish to buy a house for both of us. I am an entrepreneur while my partner is a salaried individual. How can we apply for a home loan together?

While Supreme Court decriminalised homosexuality in 2018, same-sex marriages are yet to receive a legal status in India. A couple has filed a petition in Delhi High Court for legally recognising same-sex marriages, following the refusals from banks to open a joint account for them.

While you can build a house together and make it a “home,” you cannot apply for a home loan jointly. If one wants to apply for a home loan jointly, one of the mandatory requirements is proof of relationship – which is to be provided irrespective of the joint applicant being a partner, a parent, a child, or siblings. In the case of a couple, a marriage certificate is required.

One can apply for a home loan jointly if they are willing to provide the KYC documents, income proof and proof of marriage (marriage registration certificate). Since same sex marriages are not legalised in India, joint application with your partner will not be possible. Not just for home loans, this is applicable to any loan to be taken jointly.

Your partner can however be the guarantor in your loans – home loan or any other loan.

Q5. We are a same-sex couple. Can I gift any of my financial assets to my partner, without attracting any taxes on the same?

Under the Income Tax Act, gifts received from relatives are not taxable, and there is no limit on money that can be received as a gift. Money received from anybody other than a relative, is taxable if the aggregate value exceeds Rs. 50,000/-.

Section 2(41) of the Income Tax Act, 1961 defines the term 'Relatives' as below: “Relative”, in relation to an individual, means the husband, wife, brother or sister, or any lineal ascendant or descendant of the individual. Section 56(2) covers the list of relatives where the spouse is defined as “husband” or “wife”.

As a married couple, it is quite common for spouses to give assets as gifts to their partners, without incurring tax liabilities. Unfortunately, until now, the same-sex marriages are not legalised in India, and it is also not specifically defined by the Income Tax Act. This makes it difficult for same sex partners to claim benefit as ‘spouse’ or ‘relative’ under the existing tax position, as it is governed by the legal position of such marriages.

Considering the legality, the same sex couples are not eligible to take benefits of exemptions under Section 56(2) of the Income Tax Act. Any gifts received over and above 50000 shall be taxable in the hands of the receiver.

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First Published: 18 Jun 2022, 02:42 PM IST