Readers' Corner: Taxation

Tier-II account of the National Pension Scheme allows greater flexibility attached in respect of withdrawal options

I pay Rs 30,000 as maintenance to my wife. We are separated. Who pays tax on this money? Shouldn’t I be getting a deduction and she be paying the tax? 

There is no specific provision/clause available in The Income Tax Act, 1961, on the taxability of alimony payments. Such a payment may be considered as a capital receipt (if paid in lump sum) and hence, not taxable. On the other hand, this may fall under the ambit of revenue receipt (if paid on a monthly basis) and,  therefore, liable to tax in the hands of the recipient.

There are judicial