Alimony in divorce proceedings in India

Understanding alimony

Divorce is a complex and multifaceted process that involves legal, emotional, and financial aspects. Alimony, as one component of divorce, can be particularly contentious and requires careful consideration by women (and children) and it’s required that the court to ensure fairness and financial stability for Women & children.

a)????? Definition of Alimony: Alimony, also known as spousal support or maintenance, is a legal obligation for one spouse to provide financial support to the other spouse after a divorce or separation. The purpose is to help the financially dependent spouse maintain a similar standard of living as during the marriage.

b)????? Timing of Alimony: Alimony payments typically begin after a divorce is finalized, and a court order has been issued. The timing may vary depending on the specific circumstances and the legal process in each jurisdiction. However, Court also grants interim maintenance while court proceedings under way.

c)?????? Divorce Process: The duration of the divorce process can vary significantly. Mutual consent divorces, where both parties agree to the divorce terms, can be relatively quick, often taking 6 to 9 months. In contrast, contested divorces, where there are disagreements over various aspects, such as property division, child custody, and alimony, can take much longer and potentially extend for years due to legal battles.

d)????? Emotional and Practical Challenges: Divorce is not just a legal process; it's also emotionally and practically challenging. Friends and family members often provide support to individuals going through a divorce as they navigate the emotional and logistical aspects of ending a marriage.

e)????? Financial Implications: Divorce can have significant financial implications, including the division of assets and debts, potential alimony payments (mostly lump sum), child support obligations, and the cost of establishing a new household. Starting afresh after a divorce can indeed be costly.

f)?????? Controversy Surrounding Alimony: Alimony is a contentious issue in many divorce cases. Disagreements often arise over the amount, duration, and necessity of alimony payments. Courts consider factors such as the length of the marriage, the financial situation of both spouses, and the standard of living during the marriage when determining alimony awards. In India, as per Laws of Alimony it can be provided to any spouse. But in most cases, it is awarded to the wife by her husband.

Does the law provide for alimony in India?

The law in India does provide for alimony and maintenance in the context of divorce and marriage dissolution. The provisions for alimony and maintenance are covered under various personal laws in India, which apply to different religious communities:

a)????? Hindu Law: Under Hindu law, both the Hindu Marriage Act, 1955, and the Hindu Adoption and Maintenance Act, 1956, provide for the payment of alimony and maintenance. These laws apply to Hindus, Buddhists, Jains, and Sikhs.

b)????? Muslim Law: In Islamic law, there are provisions for maintenance (known as "Nafaqah") that can be claimed by a wife from her husband during the marriage and after divorce. The Muslim Women (Protection of Rights on Divorce) Act, 1986, also provides for certain rights and maintenance for Muslim women after divorce.

c)?????? Christian Law: The Indian Divorce Act, 1869, governs Christian marriages and divorces. It contains provisions for maintenance and alimony for spouses.

d)????? Parsi Law: The Parsi Marriage and Divorce Act, 1936, apply to Parsi marriages and contain provisions for alimony and maintenance.

e)????? Special Marriage Act: The Special Marriage Act, 1954, applies to inter-religious and inter-caste marriages in India and provides for maintenance and alimony in case of divorce.

Who can ask for alimony?

Personal laws differ in their treatment of alimony and maintenance. Husbands can be held accountable for alimony payments to wives under all personal laws. For example, whereas both the husband and wife can seek alimony under the Hindu Marriage Act of 1955, which applies only to Hindus, only the wife can seek it under the Special Marriage Act under divorce alimony rules in India, which applies to all citizens of India. The opposite is rarely done.

There are two main types of alimony:

1)????? Interim Maintenance: This is temporary financial support paid during the course of divorce proceedings until a final decree is issued.

2)????? Permanent Alimony: This is the financial support awarded as part of the final divorce decree.

Alimony is also independent of the assets that the partner has a joint stake in, like joint bank accounts, property that’s co-owned by a couple, etc. Importantly, alimony is not automatically granted; it must be claimed by the spouse seeking it.

Why alimony?

We don’t live in an equal or fair world. And we rarely have equal or fair relationships. Sometimes we do things for love. We have all seen friends move states (even countries), jobs and social circles to be with their partner, only to realize that the marriage isn’t working. Many (mostly women) sacrifice career opportunities and educational pursuits for the sake of their marriage. And this is where alimony becomes necessary. Alimony serves several important purposes in the context of divorce and marriage dissolution:

a)????? Recognition of Sacrifices: In many marriages, one spouse may make significant sacrifices for the sake of the relationship. These sacrifices can include compromising career opportunities, giving up educational pursuits, or dedicating time and effort to homemaking and child-rearing. Alimony acknowledges and compensates for these sacrifices made by one spouse for the benefit of the family unit.

b)????? Fairness and Equity: Alimony aims to address the financial disparities that can arise after a divorce, particularly when one spouse is financially vulnerable or disadvantaged compared to the other. It seeks to create a fair and equitable outcome by providing ongoing financial support to the spouse who needs it.

c)?????? Transitioning to Single Income: Divorce often results in a significant change in financial circumstances, particularly for the spouse who may have been financially dependent during the marriage. Alimony helps this individual transition to a single-income reality by providing financial stability during the post-divorce period. This support can help them cover basic living expenses and regain their financial footing.

d)????? Investing in the Future: Alimony can enable the recipient spouse to invest in their future, whether it's pursuing further education, acquiring new skills, or reentering the workforce. This investment can enhance their employability and improve their long-term financial prospects.

e)????? Mitigating Immediate Financial Challenges: Divorce can bring immediate financial challenges, such as finding a new place to live, covering legal expenses, and adjusting to a different standard of living. Alimony helps mitigate these challenges by providing ongoing financial support.

f)?????? Promoting a Better Future: Alimony can contribute to a smoother and less acrimonious divorce process by ensuring that both spouses have the financial means to move forward independently. It can pave the way for a better future for both parties, even in the aftermath of a difficult separation.

Thus, alimony plays a crucial role in addressing the financial and practical implications of divorce, acknowledging the contributions made within the marriage, and striving to achieve a more just and equitable outcome for both spouses. Its importance lies in providing a safety net during a period of significant life transition and allowing individuals to rebuild their lives with financial stability.

How much?

Criteria to get alimony

The amount and duration of alimony can vary based on factors such as the length of the marriage, the financial status of both spouses, and the specific circumstances of the case.?While the ultimate decision will vary by the case (and each state has its own set of guidelines for judges to follow), the following are the national averages based on the length of marriage to get alimony in India:

·???????? 5 Years: Alimony is awarded for approximately half of the period of your marriage if you have been married for less than five years.

·???????? 10-20 years: You should expect to pay alimony for 60 to 70% of the length of your marriage on average. As a result, if you were married for 20 years, your alimony will most likely last 12 to 14 years. However, it can vary greatly depending on your specific circumstances and the judge hearing your case.

·???????? 20+ Years: Marriages that have lasted 20 years or more are more likely to receive permanent alimony. It indicates that you should expect to support your ex until they retire, die, or remarry.

In contested divorces, the court determines the appropriate amount of alimony if the parties cannot agree on it. It's important for individuals going through a divorce in India to consult with legal experts who can provide guidance on their specific situation and the applicable laws in their religious community or under the Special Marriage Act.

When you’re the party claiming alimony, the onus of proving how much you stand to lose lies with you. If you’re gearing up for a separation, it is advisable to keep an assiduous track of your monthly expenses so you’re compensated correctly at the time of divorce. Sadly, the law doesn’t provide for a formula. As a result, every divorce case is different, which can be incredibly frustrating for both parties.

If the divorce is through mutual consent, both parties would need to agree on the alimony and maintenance before going to court. This can include reimbursement of any expenses by one partner to another for any education or up skilling that can result in increased income. The parties can also agree for the alimony to be rehabilitative, which implies paying just enough for the other to get back on their feet.

For contested divorces, the courts do a thorough investigation of the financial health of both parties—from income and assets to liabilities and expenses—to arrive at the amount that ought to be paid. This comprehensive audit ensures that the better-earning spouse isn’t presenting a false picture of their finances. The general guidance is that the lesser-earning spouse is given enough money to maintain the lifestyle they had at their marital home.

Factors taken into consideration by the court while calculating the alimony amount include:?

·???????? Social status and living standard of both the parties.

·???????? The income of both husband and wife and other assets including properties

·???????? Dependents and liabilities of the husband

·???????? Child/children’s education and upbringing expenses

·???????? Health state and age of both the parties?

·???????? The duration for which the couple has been married?

·???????? Behaviour and conduct of both the parties?

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Quantum of Alimony?

·???????? When alimony is paid periodically: When the alimony is paid periodically/monthly, it is set at 25% of the total monthly salary of the husband. The Supreme Court of India, in one of its judgments, stated this 25% is the benchmark amount and is also just and proper. However, it is important to remember that there are no set rules for alimony as each case has different situations and facts.?

·???????? When alimony is paid in a lump-sum amount: According to the divorce alimony rules, no set benchmark settlement exists for one-time settlement alimony. It ranges from 1/5th or 1/3rd of the husband’s total worth and is paid in the form of a lump-sum amount.?

·???????? If the wife is working and earning good: In case, the wife is working and also drawing a handsome salary or income, her earnings are taken into consideration along with the husband’s earnings. Depending on these facts and figures, the court decides whether the wife will receive any alimony or not. If yes, then that amount is also decided by the court taking into consideration all facts.?

·???????? If the husband earns less than his wife: A Hindu husband is allowed to claim alimony from his wife if his earnings are less than that of his wife or if he does not work at all. Such cases are rare.

In case, there is a change in circumstances after the permanent alimony is decided, either of the parties can file a?Divorce Petition?in court. These changes could include the wife remarrying, the wife starting to earn more than her husband or the husband being unable to maintain his wife due to financial crisis, the alimony-paying spouse starting to earn more or the alimony-receiving spouse getting richer. In all these cases, one can go to court and see if there is any scope for change.?

A difficult choice-monthly payment or one time

Nobody “plans” for a divorce while organising their personal finances. When you’re the partner who has to pay alimony, it will take a toll on your finances, and if you’re paying child support, even more so. If you are the one supporting your ex-partner, it might be worth considering a one-time payment rather than opting for monthly payments, which can be very challenging if you have an unpredictable income flow as an entrepreneur or a professional. Monthly payments can also hamper future investments. A one-time payment, on the other hand, allows for closure. Neither type of alimony payment is tax deductible so you could face a liquidity crunch temporarily during the process of your divorce. Lawyers’ fees can also stack up. Financial advisers generally suggest liquidating an asset to close out the payments once and for all. In a way, you must let go to move forward.

But if you opt for regular payments and find that there is a drastic change to your financial situation—a layoff or perhaps a rough patch in your business—you can always approach the court to state the same and get your alimony payments modified or, in some cases, terminated. If your former spouse remarries, you aren’t obligated to pay alimony either. That said, not paying alimony that’s been agreed upon amounts to contempt of court, so remember that there are serious legal repercussions if you skip payments.

Thus, lump sum makes sense.

Alimony is provided to the financially vulnerable partner by the one with higher earnings and better financial health. Irrespective of the type of divorce, if the finances aren’t ironed out clearly, you can find yourself staring at a very rough financial patch in the near future. Alimony is also taxed very differently in the hands of the receiver. If your alimony (received) is a onetime settlement, you will not be charged any tax on it and it is not considered as income, as it is considered as “Capital Receipt”. However, if you receive it monthly, it will be considered income and taxed the way any other income is.

?What belongs to a Wife after Separation?

According to custom in India, any type of jewellery including gold, silver, alloy, and precious stones (which are considered as “Stree Dhan” and belongs exclusively to women), fixed assets such as property, and other assets such as cars, furniture, paintings, appliances, and artifacts all belong to the wife. These could be presented to her before, after or during the marriage.? In addition, gifts presented to her from anyone are her property too. These could be from her husband, in-laws, relatives, friends and acquaintances. The earnings of the wife before or after marriage are also her property.?

What can the Wife not claim after Separation?

The wife does not have any right to any jewellery, valuables or gifts gifted to the husband by the wife’s parents before, after or during the marriage. Any asset that was bought by the husband in the wife’s name, without passing it on as a gift, also does not belong to the wife. If the wife has spent any of her earnings on the household, those cannot be claimed.?

When is it not necessary to pay alimony?

If the woman remarries, the husband is not obligated to pay alimony, but he would be compelled to support any children born from their union. He can also fight alimony because his wife works but cannot refuse to pay if ordered. The amount she earns will be taken into account by the court. For example, if she is barely making enough money to get by but has a better life when married, the court may compel the husband to pay to supplement her wages to maintain her quality of living. Is it possible for the party paying alimony to quit paying?

It varies depending on the circumstances. If the wife grows wealthier, the husband must present proof to the court, and the court will consider the facts presented to indicate that the wife has become wealthier since the alimony was issued.

CA Harshad Shah, Mumbai [email protected]