The film board did not respond to multiple requests for comment from CNN.
"I know my job, the producer is free to approach the court and I don't want to comment anymore," Pahlaj Nihalani, chairperson of the CBFC, told CNN affiliate, News 18.
Filmmaker, Prakash Jha, said they'll appeal the decision with the Film Certification Appellate Tribunal. "We just want to tell a beautiful story, a good story about four women," he said.
Gender imbalance
"Lipstick Under My Burkha" has won two awards for its portrayal of women; the Oxfam Award for Best Film on Gender Equality and the Spirit of Asia Award at the Tokyo International Film Festival. It's also in the running for a third award at the Glasgow Film Festival.
Plabita Borthakur, who plays one of the main characters in the film, says the act is a sign of the gender imbalance inherent in the movie-making world. "This whole situation we are in right now itself says we really need more films like Lipstick to change the system," she told CNN.
Borthakur says sex comedies from the male perspective are often released without any controversy, pointing to the film Yaariyan, a 2014 teen sex comedy about a boy's first year in college. One of the main songs has the lyrics: "There's a buffet of girls, you can choose whichever you want."
A number of prominent figures have spoken out against the ban.
Shashi Tharoor, a member of Parliament in India, tweeted, "And I thought the government was moving away from censorship to certification. Not certifying is worse than censorship."
Bollywood actor Farhan Akhtar also criticized the move, telling people to "keep your barf bag ready" over the decision.
Cut and run
India's film board regularly censors films.
In the Indian version of the Oscar-nominated film "Moonlight," the board cut two scenes which depicted the main character, a gay man, kissing another man.
In 2016, the board clashed with directors of the film "Udta Punjab," a film depicting the drug pandemic in the west Indian state of Punjab, when it asked for multiple cuts.
"Our board is not supposed to be a censor board, it's supposed to be a certification board," said Varun Grover, a screen writer and lyricist based in Bombay.
In recent years, Grover said, it's become more and more difficult to get any "bold" films or films that show "dissent against any kind of establishment," certified.
"The current chief is probably the most regressive person to hold that office," Grover said. "He's putting his own idea of morality onto the entire nation."