A Divorce Case

Tax queries 689 views 2 replies

gopal krishna lodha

article clerk

27 Points Joined October 2008

An women has received 20 lakh from his husband on account of divorce pursuant to an agreement. Women has made F.D of same amount and is earning interest on such income @ 10 % P.a.

What Will be Tax Treatment Of Rs 20 lakh received and interest earned on that income.

Replies (2)

Aditya Maheshwari

CA in Practice

35867 Points Joined June 2009

Amount received on divorce called as alimony is a capital receipt and hence not taxable in the hands of the wife. Interest received on such FD will be taxable in the hands of the wife as normal interest income.