Rajiv and Anita had been married for ten years. Due to certain irreconcilable differences that cropped up between them, they decided to separate. Apart from the physical and mental toll that divorce proceedings inflict on both partners, Anita also had to sort out the complex financial implications of the divorce settlement. She had numerous questions looming in her head about alimony, the assets she was entitled to, and the taxation implication for those assets. She wanted to know how much money she would actually have in her hand post the divorce to support herself.

Anita‚Äôs story will be familiar to many women undergoing divorce. Undoubtedly, divorce proceedings are a complex and time-consuming process. The monetary agreements arrived at as part of the divorce settlement have their own tax connotations. Women have to be well aware of how much alimony they are eligible for, whether the alimony amount is taxable, and if so, how taxation can be avoided in a legal way …

 

Read the full article published originally on Hindu Business Line: How alimony is taxed in India