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.
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