New Delhi, July 21 -- While a failed marriage causes immense emotional distress, its financial and tax implications can't be understated.

In India, a court decides how much maintenance one spouse will pay to the one earning less or having no income at all. The maintenance could be in different forms: one-time, periodic, or transfer of assets. Different types will have different tax treatment.

However, it must be noted that the Income Tax Act,1961, does not contain specific provisions on the same. Relevant case laws, along with analogous provisions, are used to determine its taxability.

The lump sum maintenance a spouse receives is not taxable. It is tax-exempt because it is considered a capital receipt, which does not fall within the a...