Maintenance by divorced lady

Dear Sir,

Hope you are doing well !!

There is no specific provision of the Income Tax Act, 1961, that governs the taxability of alimony. The taxability of alimony all boils down to how the payment is made. Past judgments in various scenarios have also helped us gain a better understanding of the same.

– In case of a lump sum payment of alimony:
Here, the alimony is treated as a capital receipt, and therefore, the provisions of the Income Tax Act, 1961 do not apply. Hence it is not treated as income and is not taxable.

– In case of recurring payments of alimony:
Alimony, in this case, is considered as a revenue receipt. Therefore, it is treated as income that is taxable in the hands of the recipient.

Nevertheless, it needs to be noted that the person who makes the payment of alimony may not claim any sort of deduction against the same.

It is advisable to take a phone consultation for detailed discussion.

- Monthly maintenance is taxable under the head income from other sources u/s 56. 

Hi,

Yes it would be taxable under the head income from other sources under section 56. 

The relevant extract of the section is reproduced below for your ready reference;

56. (1) Income of every kind which is not to be excluded from the total income under this Act shall be chargeable to income-tax under the head "Income from other sources", if it is not chargeable to income-tax under any of the heads specified in section 14, items A to E.

Lump sum amount received as alimony is not taxable. However, alimony payments will be treated as income in the hands of recipient 

Monthly Maintenance is taxable there is a case law ACIT vs Meenakshi Khanna (ITAT Delhi) However single payment is not taxable as it is capital receipt.

There is no specific section for same but based on few judgement a monthly receipt of such money would be taxable.

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Thank you

Hi

The amount of lump sum received as permanent alimony on account of  divorce is not taxable. It is considered to be a capital receipt and, therefore, the provisions of Income-tax Act 1961 (The Act) are not applicable. So , the amount of permanent alimony is not treated as income and thus not taxable..

2)Monthly alimony payments will be treated as income in the hands of the recipient

Hi

Some Case Laws 

Shrimati Roma Sengupta Vs. CIT (Calcutta High Court) –Lump sum alimony is a capital receipt and therefore not taxable

ACIT Vs Meenakshi Khanna (ITAT Delhi) –Lump sum amount received from ex-husband as alimony is not taxable

Hello,

Monthly Maintenance would be taxable under the head of other sources.

Regards,

CA Hunny Badlani

Maintenance amount as decided by court is not an income  hence not taxable