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Taxability of Alimony

Table of Contents

Meaning of Alimony

Any sum of money (recurring or lump sum) received from spouse after legal separation or divorce for the purpose of maintenance of spouse or child.

Taxability in hand of the recipient

There is no specific provision which governs the taxability of alimony under the Income Tax Act 1961. As a general principle, recurring receipts are taxable whereas capital receipts are tax-free.

Alimony received in cash

Recurring payment is taxable in the hands of recipients under the head Income from Other Sources. However, if a lump sum amount has been received then it should be considered as the capital receipt, hence not taxable.

Alimony received in form of the asset other than cash

Asset transferred to the spouse without consideration is tax-free as it is covered under gift to the relative which is exempted in case of recipients.  However, any asset transferred after divorce to the former spouse without consideration shall be treated as the gift from non- relative and liable to be taxed. Income from such asset transferred to the former spouse shall not be clubbed and would be taxable in the hand of a recipient.

Deduction to transferor

No deduction is available to the transferor whether the alimony is paid in cash or in form of assets.

Rohit Pithisaria

I am a Chartered Accountant based in Jaipur (Rajasthan). Started TaxAdda in 2011 as a blog and now providing various service related to GST and Income Tax to the client all over India. Also writing actively for TaxAdda blog and our e-Magazine on GST & Income Tax.

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