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Is it allowed.?

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rounak khandelwal

21 Points Posted on 09 February 2020

In the assessment year 2018-19 Mr Roshan entered into an agreement with his employer that 50% of his salary would be paid to his wife as alimony. In return to that Mr Roshan claimed deductions from his salary for the amount paid to his ex-wife as alimony. Is it allowed.?
Please discuss.

Replies (2)

Quick Summary

This discussion examines whether an individual can claim tax deductions for alimony payments made to an ex-wife, as per an agreement where 50% of salary was designated as alimony. Generally, alimony payments are not considered deductible expenses under UK tax law, meaning the full salary income is assessed in the hands of the husband. While lump-sum alimony is typically treated as a capital receipt and not taxable, monthly alimony payments are usually considered taxable income for the recipient, with no corresponding deduction for the payer, unless the payments are specifically for certain expenses like rent or school fees.

rama krishnan

5751 Points Posted on 09 February 2020

In my opinion, there's no provision in income-tax act to claim alimony as expenses. so the entire salary income will be assessed in the hands of husband

Atif Khan

110 Points Posted on 09 February 2020

Alimony, which is paid as a lump sum amount, is not taxable. As per the written law, lump sum alimony or maintenance is not classified as ‘income’ as defined under the Income Tax Act, 1961, and there is no specific provision that determines its taxability. As per taxation laws, this is considered as ‘capital receipt’.

However, if you receive the alimony as a monthly amount, it will be treated like a monthly salary or a ‘revenue receipt’, which is taxable. Also, the ex-spouse paying such alimony does not get a deduction against income. It is no doubt unfortunate that choosing to receive alimony every month as a safety net to meet expenses is subject to taxation.

However, this monthly alimony would not be liable for taxation if the ex-spouse pays a sum for certain expenses like house rent, school fees and household expenses.