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A divorce is not only a psychologically stressful matter, it can also have serious financial consequences. After all, a marriage is nothing more than an investment of time, energy, feelings and also money.
If you are considering a separation or are someone who likes to stay updated on divorce proceedings, here is an overview of what exactly ‘maintenance’ is and how it is calculated in India.
What is maintenance?
Maintenance (alimony payments, support or subsistence) is understood to mean financial support to which a spouse is entitled after a divorce. Generally, it is granted when one spouse does not have sufficient resources to meet the basic needs of life. By law, maintenance can be awarded to each spouseNormally it must be given by the husband to his wife.
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Who is entitled to maintenance?
Under Section 25 of the Hindu Marriage Act, the court awards permanent maintenance to the wife or husband for their maintenance and livelihood. In case the wife is a working woman but there is a significant difference between her net income and that of her husband, she is still awarded maintenance to enable her to maintain the same standard of living as her husband.
If the wife has no income, the court will consider her age, educational attainment and earning capacity to determine the amount of alimony. If the husband is disabled and unable to work, but the wife has an income, the court will award alimony to the husband.
How is maintenance calculated?
There is no fixed formula or rule for calculating the amount of alimony that a husband must pay his wife. The alimony can be paid as a regular or monthly payment or as a one-time payment in the form of a lump sum.
If maintenance is paid monthly, The Supreme Court of India has set 25% of the husband’s monthly net salary as a guideline.what should be awarded to the wife. There is no such standard for a lump sum, but normally The amount is between 1/5 and 1/3 of the husband’s net assets.
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However, there are certain factors that the court will take into account when calculating the amount of alimony. These factors may vary and include:
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Income and other assets of the husband and wife, if any
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Behavior of husband and wife
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Compulsory deductions like income tax, EMIs, loan repayments etc. are taken into account while calculating the net income of the husband
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Liabilities of the husband, such as dependent parents
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Social status and lifestyle of both parties
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Age and health of both parties
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The period during which the couple was married
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Costs for the education and upbringing of the child/children
The amount of maintenance or subsistence to be awarded is therefore determined by the court on the basis of a number of factors which depend on the specific circumstances and facts of the case.
Note: The above information is of a general nature and is intended for educational purposes only. Nothing contained herein should be construed as investment, financial or tax advice, nor should it be considered an invitation or solicitation. Readers are advised to exercise discretion and seek independent professional advice before making any financial or legal decisions.
Source: https://www.adityabirlacapital.com/
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