Tax matter
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
13 October 2013
Any Wife received Compensation from her husband for life maintenance.......
Is tax free ???????
Which Section ?
Is tax free ???????
Which Section ?
13 October 2013
Hi
Alimony can be a one-time receipt or a periodic receipt or a combination of both. It is not specifically covered in 'income' as defined under the Income Tax Act, 1961 ('the Act') and there is no specific provision which governs its taxability.
As a general principle, a capital receipt is non-taxable while a revenue receipt is taxable. In an old Mumbai High Court ruling, it was held that monthly alimony, being a regular and periodic return from a decree, would constitute taxable income. In contrast, the lump sum payment received was held to be a capital receipt and, hence, not taxable for the former spouse. This decision was in the context of cash payments and does not deal with assets transferred as a part of the separation.
Alimony can be a one-time receipt or a periodic receipt or a combination of both. It is not specifically covered in 'income' as defined under the Income Tax Act, 1961 ('the Act') and there is no specific provision which governs its taxability.
As a general principle, a capital receipt is non-taxable while a revenue receipt is taxable. In an old Mumbai High Court ruling, it was held that monthly alimony, being a regular and periodic return from a decree, would constitute taxable income. In contrast, the lump sum payment received was held to be a capital receipt and, hence, not taxable for the former spouse. This decision was in the context of cash payments and does not deal with assets transferred as a part of the separation.
13 October 2013
Read more at
https://articles.timesofindia.indiatimes.com/2013-06-29/india/40270801_1_tax-officer-alimony-indian-tax-laws
https://articles.timesofindia.indiatimes.com/2013-06-29/india/40270801_1_tax-officer-alimony-indian-tax-laws
Querist : Anonymous
Querist :
Anonymous
(Querist)
20 October 2013
Thanks...Sir
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