Alimony receipts

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One-off lump sum alimony payments received by a wife, even if routed through her mother-in-law as part of a family settlement, are generally considered non-taxable capital receipts under Indian law. However, regular, periodic alimony payments are treated as taxable income. There's typically no TDS required on lump sum family settlement payments, and documentation like bank statements can serve as court evidence.

P.Madhivadhanan

P.Madhivadhanan (Querist)

23 September 2025 Money received by wife from husband through her mother in law by out of court settlement and it is shown as evidence in court as a settlement and the proof to be given to the court. The amount received by wife is taxable or not and the money is deposited by her mother in law in Bank whether that amount is TDS deductible?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

23 September 2025 One-time lump sum payments from the husband (including routed via mother-in-law) received under family settlement or as alimony are treated as capital receipts and are not taxable in the wife's hands under the Income Tax Act, 1961.

Regular, periodic alimony payments (e.g., monthly allowance) are classified as income and become taxable under the Income Tax Act in the hands of the wife, under the head "Income from Other Sources".

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

23 September 2025 There is no requirement for Tax Deducted at Source (TDS) on amounts paid by a mother-in-law to a daughter-in-law/heir under family settlement since such payments are not considered as “income” or taxable perquisites.

TDS provisions would apply only if the payment was part of a taxable transaction (business/profession perquisites or regular income) which is not the case in family settlement scenarios.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

23 September 2025 Written documents, bank statements, and settlement agreements can be submitted in court as corroborative evidence even without registration, providing proof of such arrangements and their non-taxable status for family settlements.

Thus, one-time settlement or gift received by a wife from her husband through her mother-in-law is not taxable under Indian law, and there is no requirement for TDS deduction on this amount; proper documentary evidence should suffice as court proof.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

24 September 2025 Good Luck...

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