The couple's plea for refugee status was rejected by Australian immigration and refugee authorities but subsequently a court in Canberra has ruled in their favour.
The duo, who landed in Australia five years back, were earlier refused a protection visa by the Department of Immigration and Citizenship, The Canberra Times reported.
The pair, a Sikh and a member of the Hindu backward caste, married secretly in India in 2007 after the man's parents refused to accept the relationship on religious and caste grounds.
The modern day Romeo and Juliet lived separately before leaving for Australia in 2008.
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They appealed to the Refugee Review Tribunal after their plea for refugee status was rejected by Australian immigration authorities.
This appeal was also rejected by the tribunal, despite its acceptance that there was a history of honour killings against those who entered inter-caste marriages without family approval in the Punjab region.
The tribunal said the couple could relocate within India to a large city, such as Mumbai or New Delhi, to avoid repercussions.
The love-struck couple took the matter to the Federal Circuit Court in Canberra, which ruled in their favour and ordered the tribunal to review its decision.
In a judgment published this week, Federal Magistrate Warwick Neville found that the tribunal had failed to comply with the Migration Act when deciding the matter.
But the couple could still be expelled after the authorities this week appealed against the decision in a higher court.