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Money received in divorce case

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Querist : Anonymous

Querist : Anonymous (Querist)

21 February 2011 Dear Experts,

Mr. A has given Mrs. X RS. 10 lacs as a final payment in th case of divorce.

What is the treatment of the same in hands of :

1) Mrs. X who receives the amount. Is it taxable? If yes under which head, If no exempted under which section?

2) Mr.X the payment of the same.

Thnx in advance

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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21 February 2011 Being a capital receipt, and, not having the ingredient as it could be called as an income, it will be not taxable in the hands of Mrs.A

For Mr X also it will be in the form of a capital expenditure and can not be claimed as a loss.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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21 February 2011 Expert Aditya Maheshwari's reply with various citations can be viewed by following the below link -

https://www.caclubindia.com/forum/is-money-received-in-divorce-taxable-80923.asp?offset=1

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