BRIGHT SIDE OF DIVORCE - NO TAX ON LUMP SUM ALIMONY : Marriages are made in heaven, but a divorce happens on earth and with it comes the inevitable question of alimony and its tax implications. In a recent decision the Delhi Income-tax Appellate Tribunal (ITAT) has held that a lump sum payment received from a former husband, against relinquishment of monthly maintenance is a capital receipt and is not taxable. The case relates to a Delhi-based woman, who had received a lump sum of $99,000 from her ex-husband based in the United States, but had not shown the amount in her tax declaration. Based on current exchange rate this sum translates to approximately Rs. 60 lakh. Under Indian tax laws, any sum of money received by an individual without any consideration (without getting anything in return), in excess of Rs 50,000 in a year, is taxable. But if the same is received from a relative, such as a spouse, or on certain occasions such as marriage, it is exempt.
Posted on: Sat, 29 Jun 2013 04:02:21 +0000
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