Can Divorce Settlement Be Done In Cash?

I am in a software company, hence i am in salaried class. I am getting divorce from my wife through mutual consent in court, for which i need to make permanent alimony of Rs 15 lakhs. I have the sources of income for this amount. My wife is asking the complete amount in Cash(not agreeing for Demand Draft), which will be settled infront of the Judge. Is there any violation of IT law if i pay this amount in the form of cash. Is there any limit for Cash transaction for Divorce settlement

Yes, you can pay divorce alimony in cash.There is no restriction of any kind as far as Income Tax Act is concerned. If you have confusion regarding section 40A(3) or section 269SS or 269T , be assured that non of these provisions are applicable to your case because while provision under section 40A(3) which prohibits payment of expenditure exceeding Rs 20000 in cash is applicable for business income , section 269SS or 269T prohibit accepting or repaying a loan or deposit exceeding Rs 20,000 in cash . The permanent alimony of Rs 15 Lakhs is neither loan nor deposit nor a business expenditure.Therefore none of the sections-Sec. 269 or sec.269T or sec. 40A(3) are applicable in your case. So, go ahead and have peace of life at the cost of Rs 15 lakhs in cash!