Income tax treatment for alimony paid

Mr.Raj,

Monthly payments treats as expenditure, which is deductable from income. Whereas lumpsum amount treats it as capital loss. which is not deductable from revenue income.Any how  court decree is required for  main evidence for such deductions.

Hi Raj,

There is a concept of diversion of title at source vs application of income in income tax.

In case alimony is payable when decreed, then this merely being application of income is not tax deductible, since the income is earned by you & subsequently applied, there is no diversion of title prior to acrual of income. Even if as per the decree, an employer pays the sums directly to the estranged spouse claiming alimony under the decree it won't alter this proposition.

In case a vested right is created on the source of income itself then the taxability may be different say a income from business/asset .

As regards taxability in the hands of the recieving party please refer to this case law "Princess Maheshwari Devi of Pratapgarh v. CIT, (1984) 147 ITR 258 (Bom.)".

Kindly look out for the above emboldened sentence on the net for elaboration.

Thanks,

Hari

Originally posted by : Hari Kumar
	Hi Raj, There is a concept of diversion of title at source vs application of income in income tax. In case alimony is payable when decreed, then this merely being application of income is not tax deductible, since the income is earned by you & subsequently applied, there is no diversion of title prior to acrual of income. Even if as per the decree, an employer pays the sums directly to the estranged spouse claiming alimony under the decree it won't alter this proposition. In case a vested right is created on the source of income itself then the taxability may be different say a income from business/asset . As regards taxability in the hands of the recieving party please refer to this case law "Princess Maheshwari Devi of Pratapgarh v. CIT, (1984) 147 ITR 258 (Bom.)". Kindly look out for the above emboldened sentence on the net for elaboration. Thanks, Hari

Agreed.

well ansered. For salaried employee there is no section to which allows to deduct such expenses whar ever dedutions from salaries are given deducted by employer. rest of the deduction are under chapter VI-A whihc is silent on this.  Pay alimony net of tax, if allowed by court.

Alimony paid is a purely personal expenditure of the payer. It is not an allowable deduction/expenditure.

If in India it was possible to get some software like free turbotax to calculate your taxes and then pay it online, It would been really a great option.