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.
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.
Yupp.. Aditya is correct!!!
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