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Alimony and Taxation: Here’s what you need to know

For most women, getting divorced is a challenging step. It can be emotionally very disturbing and unsettling for many women and create a lot of confusion, be it emotionally or financially. Stress makes life further complicated and concentrating on finances becomes difficult. One needs to plan the process through and not proceed hastily. A part of this financial plan also includes understanding the  tax audit format .           If you are one of the many women planning your finances after divorce, here we help you familiarise with the taxation process on alimony:        When is alimony not taxable? Under various circumstances, it is decided the entire amount that is to be paid as alimony will be given in a lump sum instead of instalments over a long period of time. The entire amount is paid in cash which is also known as one-time receipt. According to Bombay High Court’s order, the amount that is paid as alimony should be treated as a capital asset. Under the Income Tax
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Income Tax on Housing Society Explained

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Paying income tax is imperative and ensures the smooth running of the government machinery. But, there is a misconception among people that housing societies are exempt from paying taxes. In reality, there are several ways in which housing societies earn their income and most of these are subject to direct taxation . Let us examine in detail the income tax levied on housing societies.   Contribution from the members               The society needs money to keep its operations running. The lifts need to be regularly serviced and the water and electricity bills to be paid. Then there are the municipal taxes, security charges, among others. The money to pay all these charges is collected from the members. This income generate surplus which is non-taxable on the grounds of Concept of Mutuality. Rent received from advertisement hoardings and mobile towers Any money that is collected as rent from advertisement hoardings and mobile towers is subject to tax under the head in
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Positive effects of GST on Real Estate

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The real estate sector is considered to be one of the driving forces of the Indian economy. It has not only been a significant contributor to the India GDP but over the years has also generated a lot of employment.With a large number of taxes being subsumed under the GST Act, the real state sector taxation has been redefined completely. When GST was introduced in July 2017, the GST on real estate was 12% with input tax credit and 8% for affordable housing projects. The input tax credit is the credit on the material used for the project. At the 33rd GST council meeting held in February 2018, rates were revised to 5% and 1% for affordable housing without input credit. Majority of the builders/developers did not appreciate the changes and wanted them rolled back, as they were more agitated with the input tax credit which the government had dropped in exchange with the new GST rates. After the developers expressed their concern about the input tax credit, the GST Council/ Government d
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Latest GST Related Questions Answered

Though GST was launched in July 2017 and is now 21-month-old but doubts, queries and issues relating to it refuse to subside. Consequently, through this article we will try to provide some clarity by taking up a few frequently asked GST online questions .      How is the utilization of credits managed under the GST regime? Order of Input Tax Credit utilization has now changed, as per rules effective from February 2019, the following rules will apply – First set off Payment for Then set off IGST SGST SGST IGST CGST CGST IGST IGST CGST & SGST Does an agent or broker require registration or is the limit of 20 lacs applicable to them? GST registration online process is compulsory for assessees that make taxable supplies on behalf of other person as agents. Thus, one is mandatorily required to obtain registration irrespective of the turnover if working as an
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Is GST Structure Safe from Malware?

The dictionary meaning of malware says it’s a software designed to disrupt, damage, or gain unauthorized access to a computer system. For any new structure or system coming up online, the biggest challenge is to protect itself from malware and outside attacks or interruptions. To ensure the same a lot of firewalls are built within the structure. The GST network (GSTN) could have been exposed to all sort of cyber threats but all necessary steps were taken to protect the network from malware. GSTN has followed and embedded major threats mitigating principles addressing both internal and external threats. These include potential data tampering attempts for commercial benefit by individuals or groups, industrial espionage, insider and external attacks to steal or tamper data, along with cyber-attacks on GST system and unauthorized data and system access. The core GST system created by Infosys is not directly exposed to the internet. It has multi-layered security architecture built w
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All You Need to Know about Taxation on Alimony

With divorce comes hand in hand another concern known as Alimony and its taxability. While divorce is the legal method of putting a relationship to an end, usually monetary compensation is provided to the financially weak party by the financially stronger one for them to maintain the same standard of living after separation. The term used for such compensation is “Alimony” which is a legal obligation in most countries. In our country alimony is governed according to the personal laws and the provision of the Special Marriage Act. Another law regarding alimony is laid down in section 125 CrPc. It talks about alimony rights to wife given by the husband. Section 125, along with several other alimony rights, grants the right of Interim maintenance also. The Supreme Court in several of its judgment has made it clear that interim maintenance can be awarded before the final disposal of a case. Though there is no specific provision in the Code regarding interim maintenance judicial activi
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A Brief – Cost Inflation Index and Taxation

Inflation can change the political scenario of a country. But what exactly is inflation in simple terms? Let’s take an example to understand inflation better – Often, the price of a commodity increases over time which leads to fall in purchasing power of money i.e. if 7 items can be bought for INR 700 today, tomorrow you may be able to buy only 5 items at the same price on account of inflation. This brings us to the tax jargon i.e. Cost Inflation Index (‘CII’), which calculates the estimated rise in the cost of goods and assets year-by-year as a result of inflation. What is the significance of CII and Indexation? It is used for computation of Capital Gains and related taxes. If the index is not used, the inflated prices increase your gains and more gains result in increased tax liabilities. Therefore, the use of CII is beneficial for a taxpayer. The entire process of adjusting the cost price of a capital asset with the effect of inflation using the CII number is referred
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