Amount received by Divorcee is taxable?

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Srikanta Adhikary (Querist)
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26 March 2009 Is a lump sum amount (compensation)received by a lady from her husband at the time of Divorce taxable under the Income Tax Act 1961? If yes, then how it will be computed and under which Head of Income?

CA Devanshi Gandhi (Ajani)

CA Devanshi Gandhi (Ajani) (Expert)
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26 March 2009 i dont think it will be taxable...

Sanjay Soni

Sanjay Soni (Expert)
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26 March 2009 I support Devanshi

The receipt does not fall under the perview of Income Tax as the amount paid for the maintenance and can not be treated as income

Manmohan ACA, CS

Manmohan ACA, CS (Expert)
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27 March 2009 Princess Maheshwari Devi of Pratapgarh v. Commissioner of Income-tax 147 ITR 258 (Bom)
where as lump sum amoount is received, it will be treated as capital receipt., hence not taxable.
if monthly payments received being revenue receipt it should be taxable
However , important to note that if the settlement is as per court , the Revenue authorities will not raise question ..If the settlement is out of court, the Revenue authorities , as is the nature, may raise the question regarding the taxability of Lump sum payments. Therefore, it is better to get the stamp of Court in case of settlement.

regards........!

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Manmohan ACA, CS

Manmohan ACA, CS (Expert)
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28 March 2009 a another quesion came in my mind regarding the taxability of the revenue receipt of divorce compensation that is the amount received is allowed as dediction to husband.
if not does it not double taxation

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