Dear Sir/Ma'am,
I want to know about the taxability of the amt. received as a result of divorce settlement in various installments on various dates.
Is thus amt. is liable to tax or exempt?
If it is exempt, then under which section?
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Taxability of amount received in course of a divorce settlement
Replies (7)
In my opinion , amount received will be taxable as 'Income From Other Sources' under section 56
as souce of income is the residual (can not be allocated to other heads) in nature , and amount received is not from relative (as Husband and wife relationship is not there)
better to have other suggession who have hadled the situation pratically or refer case law
If lump sum alimony is received it is held as capital receipt thus tax free. But if money is received in monthly payments then the same has been held as income.
The amt. received is received in three installments on three different dates. Now please suggest me whether it is taxable or not.
The question is how the settlement took place. Lump sum alimony may be paid in more than 1 instalment.
Sir,
Settlement took place in three amts. You mean that the amt. is tax free
If it is so Please suggest the section under which it falls.
Settlement took place in three amts. You mean that the amt. is tax free
If it is so Please suggest the section under which it falls.
Such lump sum receipt is capital receipt and when a receipt takes the character of capital receipt it is out of income tax law. The charging section 4 of the Income tax fails in case of capital receipt. So you will not find any specific section unlike exempt income
Refer this article. There is one big reply with all details. Very useful for you.
Read more at: /experts/income-tax-treatment-for-the-amount-received-by-a-divorce-171956.asp
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