Can alimony be taxed? The Divorce Lawyer's Guide to Negotiating Alimony
Introduction: Divorce is emotional and it often involves finances, especially alimony. A common question during these negotiations is whether alimony payments are taxable in India. This guide, provided by experienced Divorce Lawyers , aims to clarify the tax effects of alimony, helping you navigate these complexities confidently. Understanding Alimony: What Is It? Maintenance is the financial support one spouse pays to the other after a divorce. Its primary purpose is to ensure that the less-earning spouse, or the one without income, maintains a living standard similar to what was experienced during the marriage. Alimony and Taxation: The Legal Perspective The Indian Income Tax Act of 1961 does not explicitly state whether alimony payments are taxable. However, the interpretation depends on legal precedents and the distinction between capital and revenue receipts. Capital vs. Revenue Receipts Explained Capital Receipts : Generally, these are not taxed unless stated by law. Revenue Rec...