The practice of providing financial support to a spouse after divorce or separation is called alimony or maintenance. Its purpose is to help the lesser earning partner to live a decent life even after separation.
Recently, the divorce of cricketer Yuzvendra Chahal and choreographer Dhanashree Verma was in the news. According to reports, Chahal has given an alimony of ₹ 4.75 crore to Dhanashree. Let us know the complete status of taxes and rules related to alimony in India.
In India, the tax status of alimony depends on how the money is being paid. If alimony is paid as a lump sum, it is considered a capital receipt and the recipient does not have to pay tax. On the other hand, if it is received in the form of regular payments (monthly or annually), it is considered taxable under “income from other sources”. For the person who pays the alimony, this expense is considered a personal expense, so whether it is lump sum or regular, there is no tax exemption. If alimony is paid through property transfer, before divorce it is considered a gift from relatives and is exempt from tax, but after divorce, if its value is more than ₹ 50,000, it can be considered taxable.
How is the alimony amount decided?
Many factors are considered while deciding the amount of alimony. According to advocate JS Rohila (Indore), the court examines the income, property, debts and investments of both the spouses. If the income of one of the spouses is much less than the other, then this is also taken into consideration. Maintaining the standard of living during the marriage is also a goal. In a long marriage, a higher or longer term alimony can be received, while in a short marriage, a lower one. Age and health also matter; the one who is young and healthy is considered self-dependent, while the sick or elderly can get more help. Custody of children, contribution in the marriage (housekeeping, career support), and the behavior of both (such as cruelty or cheating) also affect the amount. The burden of debt and property is also taken into account.
Legal basis and alimony to husband
There are several laws for alimony in India. The Hindu Marriage Act, 1955 (Sections 24 and 25) provides for temporary and permanent maintenance for Hindus, Jains, Sikhs and Buddhists. The Special Marriage Act, 1954 (Sections 36 and 37) makes rules for inter-religious marriages. Section 125 of the CrPC provides assistance to the financially weak partner for every religion. The husband can also get alimony if he is financially weak and the wife has a good income. In the 2012 case of Deepak vs Anita, the court had given such a verdict based on the husband’s dependency.
