Tax on alimony

Hi

Money received as alimony in lumpsum is a capital receipt. It is not chargeable to tax.

Considering your other incomes, it would be less than 5 lacs. Hence, no tax liabilities.

We may assist you with return filing.

- Money received as lumpsum alimony is treated as capital receipt and not taxable. Income earned from alimony received is taxable.

- As the taxable income is less than Rs.5 lacs, there will be no tax liability.

- Don't forget to claim the interest on loan once the construction is completed or repayment of loan whichever is earlier.

- Investment in equity oriented mutual funds will qualify for deduction u/s 80C.

- Don't do any transaction in cash for purchase of property.

If you receive a lump sum amount as alimony it's a capital receipt and not required to show anywhere in tax return not required to pay any tax.

Your total income is below 5 lakh so no tax is payable, however you need to file income tax return since your income is above 2.5 lakh.

Also any interest received by investing such alimony would be taxable.

Also when the construction of your house is complete and you receive the possession you need to claim deduction of interest paid on such housing loan and you may claim principal amount on such housing loan as deduction u/s 80C.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you

Hello,

Lumpsum alimony received would be exempt from tax. Interest received on such amount would be taxable.

As per the information provided, your total income would be below Rs. 5 Lakhs, therefore no tax liability would arise.

I hope that this answer satisfies your requirements. 

Regards,

CA Hunny Badlani

Dear Ma'am,

Hope you are doing well !!

It depends upon whether the alimony is in the form of monthly payments or lumpsum payment. If it is monthly payments than the amount may be liable to tax in the hands of recipient in view of the judgement in the case of Princes Maheshwari Devi of Pratapgarh vs. CIT (1984) 147 ITR 258 (Bom). If the alimony is a lumpsum payment than the amount may not be liable to tax, this being capital receipt in the hands of recipient. A lot depends upon the wording of judgement granting the alimony and its interpretation.

One time Aliomony received as a part of settlement is not subject to Tax in India.

so there will be no tax payable on the income since your other income apart from alimony do not exceed Rs. 5 Lacs which is threshold for current financial year

Hello Ma'am,

In India alimony is not taxable if it is paid in lump-sum amount. As per judgement of the Bombay High Court alimony paid in this manner is treated as a capital receipt and as per the income tax act 1961, it does not fall under the head of income. Alimony, however, is taxable if paid in the form of cash monthly as such transaction is considered to be a revenue receipt.