FinFig

Lump Sum vs. Recurring Alimony Payments 💰⚖️

Lump Sum Alimony:
🏦 Treated as a capital receipt — Not taxable! 🙌 According to the Income Tax Act, 1961, it’s not considered income, so no tax burden.
Recurring Alimony Payments:
🧾 Treated as taxable income — If you’re receiving it monthly, it’s taxable in your hands. 💸 However, the payer can’t claim a deduction for it.