Moment guide · FY 2026-27

I am receiving alimony after a divorce

Is alimony taxable in India?

Lump-sum alimony is a capital receipt and is exempt from tax, while periodic (monthly/annual) alimony is taxable income in your hands at slab. Transfers of assets under a divorce settlement are not a transfer for capital gains under section 47(ii), and income earned after divorce is never clubbed between former spouses.

The #1 trap

Applying the same treatment to both forms of alimony — a lump sum is a capital receipt (exempt), while periodic payments are taxable income at your slab. Also, transferring assets as part of a divorce settlement is not a taxable transfer under section 47(ii), and income earned after the divorce is never clubbed between the former spouses.

Pooja, who received both a settlement and monthly alimony

Pooja's divorce is finalised in 2025. The settlement deed provides for a one-time lump-sum alimony of ₹25,00,000 and monthly maintenance of ₹40,000. The lump-sum ₹25,00,000 is a capital receipt — compensation for the dissolution of the marriage — and is exempt from tax in her hands, because capital receipts are outside the income definition. The monthly maintenance of ₹40,000, which is ₹4,80,000 a year, is periodic alimony, and under the settled law it is taxable income, reported as income from other sources and taxed at her slab rate. As part of the settlement, her ex-husband transfers a flat to her, and under section 47(ii), the transfer of assets between spouses under a settlement of the marriage is not a transfer for capital gains, so no tax arises on the transfer itself. Her cost in the flat is his original cost, and if she sells it later, the gain is computed from that cost. Pooja also resumes working after the divorce, and her salary is entirely her own income — there is no clubbing with her ex-husband's income, because the spousal-clubbing rules of section 64 apply only to a subsisting marriage. She reports the monthly maintenance in her return and keeps the settlement deed, the maintenance receipts and the transfer documents. If the maintenance had been structured as a single lump sum, the whole amount would have been exempt as a capital receipt. A quick call with us dials in the final figure. Pooja also checks the source of the monthly maintenance: if the payment is received from the ex-husband's salary directly, it is still her income, because the character of the receipt, not the payer's source, decides the tax. If the maintenance is paid as a lump sum for a defined future period, it is still a capital receipt and exempt, while the same amount paid in instalments over years is taxable each year. The interest earned on the ₹25,00,000 lump sum if she invests it is her income, taxed at her slab. If the settlement transfers shares rather than cash, the dividends on those shares are her income, and the transfer itself is exempt under section 47(ii). If she sells the transferred flat, the gain is computed from her ex-husband's original cost, and the holding period runs from his acquisition date. A quick call with us dials in the final figure.