Alimony isn’t guaranteed in any divorce. It is decided by the judges on the basis of certain circumstances. In this article, you will get to know factors which play an important role in deciding the alimony and also learn ‘how will a judge calculate alimony?’.
What is Alimony?
Alimony, frequently referred to as spousal support or maintenance, is the judicially determined amount awarded post-divorce to the lesser-earning spouse. The Judge calculate Alimony by the standard of living enjoyed by both spouses during the marriage. This financial assistance acknowledges the economic interdependence established during the marital partnership and aims to mitigate any financial disparities that may arise following the divorce. The court considers various factors, including each spouse’s income, earning capacity, assets, liabilities, duration of the marriage, and standard of living, to arrive at a fair and equitable alimony arrangement.
Who is Eligible to Get Alimony?
Before the judges decide the amount of alimony, they need to figure out who is eligible for receiving the alimony and what type of alimony is appropriate.
- Under Section 25 of the Hindu Marriage Act, alimony is rewarded by the court to the wife or to the husband for their support and maintenance
- If the spouse can generate income, but there is a significant difference between their and their partner’s earnings, they will be awarded alimony to help them maintain the same standard of living as it was during the marriage
- If the husband is disabled and is unable to earn and the wife is earning, then the court grants alimony to the husband
- If either of the spouses is not earning, the court will consider their age, educational qualification, and ability to earn and then decide whether they are eligible for alimony or not
- If the partner is found to be involved in bigamy or adultery or is living separately from their spouse without any reasonable cause.
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How is Alimony Calculated?
There is not any fixed formula or a pre-determined method to calculate Alimony in India. The amount is calculated on the basis of certain criteria, which may vary in different parts of the country, and the circumstances which arise during the final divorce, which vary from case to case.
However, there are certain standards stated by the Supreme Court of India.
- If the alimony is decided to be paid on a monthly basis or periodically, the Supreme Court of India has stated that at least 25% of the earning spouse’s net monthly salary should be awarded to the payee if required
- There is no such benchmark for lump sum alimony or one-time settlement, but generally, the amount ranges from 1/3rd to 1/5th of the net income, including financial assets like property and jewellery, if any
Apart from the standards determined by the Supreme Court of India, there are also a few factors on which the judges determine the amount to be paid as alimony. These are variable factors, and hence a set of guidelines can’t be determined according to them.
- The age, educational qualification, the health conditions of both spouses is also taken into consideration. Whether the claiming party can generate income on the basis of their qualifications does affect the amount of alimony
- Liabilities on the payor such as dependent parents, loans, etc. Are also taken into account. Suppose the payor already has a burden of many liabilities and is unable to generate enough income to take care of two families. In that case, the alimony amount can be reduced, or in some rarest or rare cases, it can be completely eliminated
- The duration of the marriage is also a determining factor in certain states. Longer the marriage, the higher the amount of alimony
- If any child support is present, the higher-earning spouse or who claims custody of the child is obliged to bear the expenses of the child, and there’s no way to avoid it. The expenses include the educational expenses, cost of upbringing of the child, etc.
How Can Alimony be Paid?
Considering the financial needs of the payee, the alimony can be paid in three different ways.
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Lump sum alimony
As it is understood by the name itself, lump-sum support is to be paid as a one-time figure to the claiming party in lieu of property. A benefit of getting a lump sum alimony is that this money is not taxable and is not covered under the Income Tax act, 1961. Another advantage is the amount received cannot be altered in the future, and the money, once paid, is paid forever.
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Permanent alimony
If the court decides to provide permanent alimony, the other spouse receives spousal support until the death of either spouse. Such alimony is also called monthly or periodic alimony, as the court decides a fixed amount to be paid monthly or periodically. This fixed amount must be at least 25% of the net monthly salary of the payor according to the benchmark set by the honorable Supreme Court of India. However, the amount decided by the court can change in the future with changes in the circumstances of both parties. The irony is that permanent alimony, despite its name, does come to an end when there either the payee or payor dies or the receiving party cohabitates with another partner who can take care of their expenses.
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Temporary alimony
For getting spousal support, you don’t have to wait to get legally get divorced. in some cases, alimony is paid when the partners have separated but are yet to get divorced. Such alimony acts as financial aid to spouses to make up for their expenses of court proceedings, lawyer fees, etc. An agreement can be made outside the court to decide the amount, and if it is filed in the court, the judge inspects whether the amount is correct according to the circumstances or if any party was forced to sign the agreement.
Is Alimony Taxable in India?
Alimony can be taxable depending on the type of alimony payouts you get.
- If you are getting alimony through a lump sum settlement, the alimony is considered to be a capital receipt, and thus it is not covered under the Income Tax Act,1961
- If you are getting alimony on a monthly basis, it is treated as a revenue receipt, and the amount is included in the income and taxed for the receiving party. However, no deductions are made in the net income of the payor
Conclusion
It is now clear that alimony doesn’t try to equalize the financial status. Rather it tries to make sure both spouses are able to meet their financial needs and maintain their standard of living, just like during a marriage.
Spousal support is not just meant to be for the wives. In any case, if the husband is unable to meet his financial needs or is unable to generate income, he can also be awarded alimony.
Before finalising the alimony has to go through a vast array of factors to ensure justice for everyone. Different states have different criteria for determining the alimony amount.
FAQs
How is alimony decided by the court?
Alimony, also known as spousal support or maintenance, is determined by the court based on various factors, including the length of the marriage, each spouse's income and earning capacity, their respective financial needs and obligations, and any other relevant circumstances.
How is net worth calculated for alimony?
Net worth for alimony purposes is typically calculated by subtracting a person's liabilities (debts) from their assets (such as property, investments, savings, etc.). This calculation helps determine a person's financial standing and ability to pay alimony.
How much permanent alimony is calculated?
The calculation of permanent alimony varies depending on factors such as the duration of the marriage, the standard of living during the marriage, each spouse's financial situation, and any other relevant circumstances. There is no fixed formula for determining permanent alimony.
How much alimony can a wife demand?
The amount of alimony a wife can demand depends on various factors, including her financial needs, earning capacity, the standard of living during the marriage, and the ability of the husband to pay. There is no predetermined limit on the amount of alimony.
Can an educated wife claim maintenance?
Yes, an educated wife can claim maintenance if she is unable to support herself financially, and the court determines that she is entitled to spousal support based on her needs and circumstances.
When can a husband deny alimony?
A husband may deny alimony if he can prove to the court that the wife is financially independent or capable of supporting herself, or if there are other extenuating circumstances that warrant denying spousal support.
How can I avoid paying my wife alimony?
Avoiding payment of alimony may not be legally permissible. However, you can seek legal advice to understand your rights and options, such as negotiating a settlement or challenging the alimony amount in court based on valid grounds.
Is it compulsory to pay maintenance to the wife?
Maintenance payments to the wife are typically determined by the court based on various factors. While it is not always compulsory, courts may order maintenance payments if deemed necessary to support the wife financially, especially in cases of divorce or separation.
What is the punishment for not paying maintenance?
Failure to pay court-ordered maintenance (alimony) can result in legal consequences, including fines, seizure of assets, and even imprisonment for contempt of court.
How much maximum amount can a wife claim as maintenance?
The maximum amount a wife can claim as maintenance depends on various factors, including her financial needs, the husband's ability to pay, and the standard of living during the marriage. There is no fixed maximum amount, as it is determined on a case-by-case basis by the court.
Also, Read:
- How To File Petition for Mutual Divorce?
- Applying Divorce in India
- Child Custody after Divorce in India
