When the estranged spouse gets alimony during a divorce, is the amount taxable? Can you please explain in the below two scenarios: 1. When the divorce and alimony (one time payment, not monthly maintenance) is decided by the judge as part of the divorce case being fought. 2. When the parties agree for a mutual divorce (during mediation) and also on the alimony amount before going to the court.
1 Answers
Amount received as Alimony (in both the above cases) would be treated as capital receipts as its not in exchange of any services rendered or business. This this amount would be non taxable.
Thanks Pankaj, further to this, if monthly maintenance is awarded by the judge to the estranged spouse, would the monthly amount be subject to tax?
Monthly receipts would be treated as income and would be taxable.
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