History owes an apology to members of the LGBTQ+ community and their families for the delay in removing the ignominy and ostracism they have suffered through the centuries," wrote justice Indu Malhotra, who was a part of the constitution bench judgment in the Navtej Singh Johar and others versus Union of India case. The 2018 judgment also found the antiquated Section 377 of the Indian Penal Code to be unconstitutional in so far as it criminalized sexual minorities. LGBTQ stands for lesbian, gay, bisexual, transgender and queer, and refers to sexual minorities in their multiple variants.
Apart from legal and social hurdles, LGBTQ+ individuals also have distinctive financial planning needs. As we observe Pride Month, let’s look at how India’s sexual minorities navigate a financial landscape that isn’t suited to their needs .
The financial system in India recognises and rewards heterosexual families in various ways, but not homosexual partnerships. Married couples can back each other’s lives by buying life insurance and benefit from family floater health insurance policies of spouses. This is not available to gay couples.
“We don’t discriminate between LGBTQ Indians and their heterosexual counterparts for individual health cover. However, under our current policy norms, partners of LGBTQ Indians are eligible for family floater policy if they submit proof of family status," said S. Prakash, chief operating officer (COO), Star Health and Allied Insurance Co. Ltd. Since gay marriage is not recognized in India, the effect of asking for proof of family/marriage is a denial of family health coverage to LGBTQ+ Indians.
A spokesperson at one of India’s largest private life insurance companies, who did not want to be identified, indicated that gay partners would have to submit a declaration of their relationship in order to be eligible as each other’s nominees, which, in the absence of proof of marriage, is not possible.
Sameer Samudra 42, a management professional, who married his partner, Amit Gokhale, 40, in the US around five years ago, is finding it very difficult to navigate the financial landscape in India, after moving here three years ago .
“I can’t get a life insurance policy for my partner and we can’t get a joint loan to buy a house," said Samudra, whose marriage is not recognized in India because there is no provision for the same under the Hindu Marriage Act, 1955, or personal laws governing other religions.Heterosexual spouses can inherit each other’s property in the absence of a Will. But even if homosexual partners make their Wills in favour of each other, the likelihood of them getting challenged by legal heirs, mostly biological family members, is fairly high.
Married spouses can make gifts, of property or other assets, to each other without incurring tax liability; a couple from the LGBTQ+ community cannot do so in excess of ₹50,000. There are no provisions for them to take joint loans, home or others, either.
“Since inheritance is tricky, LGBTQ partners innovate by buying small flats separately side by side. They then break down the separating wall to live together so that even if the biological family gets one of the flats (on the death of a partner), the other partner is not left without a roof," said Sachin Jain, a Mumbai-based Spanish teacher who administers a housing group for LGBTQ+ Indians on Facebook called GHAR (Gay Housing Assistance Resource).
Renting a house can get equally difficult in a prejudiced society. The community has come up with informal means of dealing with its housing problems such as social media groups. “I have seen instances over the years of LGBTQ persons being given eviction notices by landlords on some pretext without giving the real reason, which is homo- or trans-phobia. This leads to headaches with getting deposits back, also due to the culture of self-righteous vigilantism and moral policing that is a remnant of Section 377," said Jain.
Apart from formal legal barriers, cultural and institutional acceptance is also important. “We are hesitant to approach banks and mutual funds to add each other’s names as nominees because there is little to indicate that these institutions are LGBTQ+ friendly. We need financial planners and chartered accountants (CAs) who understand LGBT issues and can advise us properly on these matters," said Samudra. While non-relatives can legally be nominees in financial products like mutual funds, a nominee only holds the property in trust for the legal heir.
The lack of insurance coverage from partners means that LGBTQ+ Indians need to have a higher rate of savings. The emergency corpus would have to be larger than what would be required to a heterosexual married couple. But LGBTQ+ couples in India cannot combine their finances and hold an emergency corpus together either. Since there needs to be a family or business relationship between two people attempting to open a joint bank account, and there is no legally recognised document that can establish the legitimacy of a gay marriage in India, couples have to keep their bank accounts separate.
Having children through artificial means is possible but it’s a difficult procedure; and gay couples cannot adopt children in India. This means that goals like children’s education and marriage will be absent in most cases.
But the absence of family support makes building a retirement corpus more important. “Making a Will is extremely important for LGBTQ Indians since inheritance laws do not recognize gay partnerships or marriage. Even if a Will is made, some personal laws do not allow all property to be willed away," said Lovaii Navlakhi, founder, International Money Matters Pvt. Ltd. Creating a private trust can resolve this, but it would impose additional compliance burdens and costs on the couple.
Suyash Tripathi, a Mumbai- based CA, who runs a Facebook group about financial planning for LGBTQ+ Indians, said that awareness about financial planning and investing in the community is extremely low. Since goals such as children’s education and marriage are often absent, many gay Indians do not save much of their income, he added.
There are no formal estimates of India’s gay population but the petitioners in the Navtej Singh Johar case put it at 7-8% of the population. A large segment of this population is still not open about their sexuality. As social norms ease following the Supreme Court judgment, the number of people acknowledging their sexual identity is set to grow manifold. This is a huge, untapped opportunity for the financial services industry