How to Handle Alimony Payments and Taxes After Divorce
Introduction Divorce is always an uncomfortable experience, and outside of the emotional toll, it often brings financial complications. One of the most significant questions to be asked when negotiating alimony is whether alimony payments are tax-deductible. I am a divorce lawyer with extensive alimony negotiation experience in India , and I would like to shed light on the taxability of alimony and maintenance payments. Navigating these tricky waters will be easier with this clarity. The Basics of Alimony: An Overview of the Issues After a divorce, one spouse pays alimony to the other as financial support. When a spouse earns less or does not earn any income, alimony is designed to enable him or her to maintain an existing standard of living. Income from Alimony: A Legal Perspective There is a concern among many individuals receiving alimony about whether or not these payments will be taxable. Taxability of alimony payments is not explicitly defined in the Income Tax Act of 1961 in Ind...