Mutual Divorce and Alimony: What Can You Claim?

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Introduction

In a mutual consent divorce, the parties control the terms. Unlike contested divorce — where the court determines alimony after examining evidence, hearing submissions, and applying judicial discretion — mutual consent divorce allows the spouses to negotiate and agree on every financial term before the petition is even filed. The settlement agreement they reach becomes, once incorporated in the court’s decree, as enforceable as any judicial order.

This combination of control and enforceability makes the alimony negotiation in a mutual divorce the single most important financial event in the divorce process. Get it right, and both parties move forward with financial certainty. Get it wrong — by settling too low, not accounting for inflation, failing to address all assets, or misunderstanding the tax consequences — and the consequences are long-term and difficult to reverse.

The Supreme Court has significantly developed the law on alimony in India over the past two years. The May 2025 ruling in Rakhi Sadhukhan v. Raja Sadhukhan established that permanent alimony should mirror the marital standard of living, mandated inflation-linked increases, and awarded the matrimonial home to the wife. The February 2025 ruling confirmed that alimony can be awarded even in void marriages. The April 2026 Supreme Court ruling fixed ₹50 lakh as full and final alimony in an Article 142 dissolution — and explicitly barred all future maintenance claims after payment. And the Parveen Kumar Jain v. Anju Jain ruling of 2025 ordered ₹5 crore in one-time alimony where the husband had concealed assets.

These judicial benchmarks do not directly set the terms of mutual consent divorce settlements — but they powerfully inform the negotiating positions of both parties and the expectations the courts will apply if a settlement breaks down and the matter goes to adjudication.

This article explains the complete framework for alimony in mutual consent divorce: what you can claim, what courts consider, the difference between lump-sum and periodic alimony, the tax consequences of each, the factors that strengthen or weaken a claim, and the practical structure of a settlement agreement that will hold.

For complete mutual divorce legal assistance — settlement negotiation, agreement drafting, and court representation — the family law team at QuickDivorce.in provides expert support across all jurisdictions in India.

The Legal Basis for Alimony in Mutual Divorce

Section 25 of the Hindu Marriage Act: Permanent Alimony

The statutory basis for permanent alimony under the Hindu Marriage Act is Section 25, which empowers a court — at the time of passing any decree under the Act — to order the respondent to pay the petitioner “a gross sum or a sum payable month by month, or for the joint lives of the parties or for such term not exceeding the life of the applicant.”

Section 25 is important for mutual consent divorce because it applies “at the time of passing any decree” — which includes the decree passed under Section 13B on mutual consent. The court that passes a mutual consent divorce decree has full authority under Section 25 to incorporate alimony terms into that decree, giving the settlement the force of a court order.

In a February 2025 ruling, the Supreme Court clarified that permanent alimony or interim maintenance can be awarded even in marriages declared void under Section 11 of the Hindu Marriage Act, 1955, because Section 25 of the Act empowers courts to grant such relief whenever any decree is passed — regardless of the marriage’s validity.

Section 24: Interim Maintenance During Proceedings

Section 24 of the HMA provides for maintenance pendente lite — financial support during the pendency of the proceedings. In a mutual consent divorce that concludes within the standard timeline (six to twelve months from first to second motion), Section 24 maintenance is relevant primarily where there is significant delay or where one party is in immediate financial distress. In most mutual consent cases, the parties agree on interim financial arrangements as part of the overall settlement rather than invoking Section 24 formally.

Section 144 BNSS: The Secular Maintenance Overlay

Section 144 of the Bharatiya Nagarik Suraksha Sanhita (formerly Section 125 CrPC) provides a secular maintenance remedy available to all spouses regardless of religion. It can be invoked alongside — and independently of — the personal law alimony framework.

The most significant legal update is the 2024 Supreme Court ruling in Mohd. Abdul Samad v. State of Telangana, which confirmed that a divorced woman can claim maintenance under Section 144 of the BNSS for life, or until she remarries, regardless of personal religious laws.

For mutual consent divorces, this secular overlay matters primarily in structuring the full and final settlement clause — both parties typically agree that on payment of the agreed settlement, all claims under Section 144 BNSS are extinguished. The April 2026 Supreme Court ruling in an Article 142 case specifically clarified that after payment of fixed permanent alimony, “no further maintenance claims would survive under Section 125 CrPC or the Army Act and Rules.” Replicating this finality in a mutual consent settlement requires careful drafting.

What You Can Claim in a Mutual Consent Divorce

The Scope of the Financial Settlement

In a mutual consent divorce, the alimony claim is not a single number to be negotiated in isolation. The financial settlement is a comprehensive package covering every aspect of the economic relationship between the spouses. It includes:

📋 Alimony / spousal maintenance — the direct financial support payment from one spouse to the other

📋 Division of matrimonial property — immovable property (flat, house, plot), movable property (vehicles, gold, jewellery beyond stridhan), and financial assets (bank accounts, FDs, mutual funds, shares, business interests)

📋 Stridhan — the wife’s absolute property given at or around the time of marriage — jewellery, gifts from her parents and relatives, and other items belonging exclusively to her

📋 Child maintenance — the financial support from the non-custodial parent for the children’s education, health, and daily expenses

📋 Withdrawal of pending litigation — both parties typically agree to withdraw all pending civil and criminal cases as part of the settlement

Each of these components is negotiable. The court, in a mutual consent divorce, does not impose terms — it incorporates what the parties have agreed. This gives both spouses leverage and responsibility in equal measure.

The Eight Factors That Determine Alimony Quantum

Whether the settlement is reached through direct negotiation, through mediation, or — if the mutual divorce fails — through court adjudication, the same eight factors shape the alimony calculation. Both parties should understand them:

Factor 1 — Standard of Living During the Marriage

The Supreme Court has underscored the importance of the fact that post-divorce maintenance should mirror the lifestyle of the wife during the period of their married life. Any settlements — whether judicial or mutual — to be arrived at between the husband and wife must take into account the actual living standards of the parties and the cost of inflation.

The marital standard of living is the baseline from which the alimony is calculated. A wife who lived in a ₹3 crore apartment, travelled business class, had household help, and maintained a lifestyle calibrated to her husband’s income as a senior executive is entitled to a settlement that reflects that standard — not a settlement calibrated to a bare minimum of survival.

Factor 2 — Husband’s Income and Earning Capacity

Post-settlement, a lot of emphasis will be laid on the husband’s earning capacity, and courts scrutinise the actual income of the husband, declared or undisclosed, including his prior earnings. Even claimed expenses like re-marriage or family liabilities will not be able to trump the principle of adequate maintenance.

In mutual consent negotiations, the wife’s legal team should request full financial disclosure — salary slips, income tax returns for the previous three years, bank statements, investment account statements, and business income documentation where applicable. Courts have consistently held that deliberate concealment of assets will not be tolerated.

In Parveen Kumar Jain v. Anju Jain (2025), the Supreme Court dealt with deliberate concealment of assets by the husband and, taking into account the wife’s accustomed standard of living and the husband’s substantial financial resources, ordered a one-time settlement of ₹5 crores for the wife and ₹1 crore for the son’s financial security.

Factor 3 — Wife’s Own Income and Financial Capacity

A wife who is independently employed, runs her own business, or has substantial independent assets is in a different position from a wife who has no independent income. However — and this is crucial post the May 2025 ruling — a wife’s earning capacity does not extinguish her right to alimony if her earnings are inadequate to maintain her pre-divorce standard of living.

The Supreme Court has clarified that a wife’s earning does not bar maintenance if it is inadequate to sustain her prior standard of living.

However, in M v. Leelavathi v. Dr. C.R. Swamy (2025), though the wife was unemployed, she was not in a stage of complete economic hardship as she had M.Tech and LLB degrees. Emphasising that determining alimony must be a balanced approach, the court ordered ₹50,00,000 as a one-time settlement to secure the wife’s future with a commensurate standard of living.

The qualification therefore has a nuanced, balanced structure: a self-sufficient wife cannot claim maintenance at the same level as a dependent wife, but her employment does not eliminate her right to settlement funds that reflect the economic partnership of the marriage.

Factor 4 — Duration of the Marriage

Longer marriages produce larger alimony claims. A marriage that lasted three years produces a different settlement calculation from one that lasted fifteen years. In a longer marriage:

📋 The wife has typically sacrificed more in terms of career, professional development, and independent earning capacity 📋 The economic interdependence of the parties is deeper and more extensive
📋 The wife has had a longer period of calibration to the marital standard of living
📋 The disruption of divorce is proportionally more severe

Courts apply a broadly linear approach — the longer the marriage, the more substantial the alimony claim.

Factor 5 — Age and Remarriage Prospects

A younger wife who is divorcing after a short marriage has, in the court’s assessment, stronger prospects for remarriage and independent economic rehabilitation than a wife divorcing in her mid-forties after a twenty-year marriage. This factor affects both the quantum and the structure of alimony.

For an older wife with limited remarriage prospects and reduced earning capacity, the alimony must be sufficient to sustain her for the rest of her life — producing either a larger lump sum or periodic alimony that continues until death or remarriage, with built-in inflation adjustments.

Factor 6 — Custody of Children and the Economic Consequences

The spouse who takes primary custody of the children bears the day-to-day financial burden of child-rearing — school fees, medical expenses, extracurricular activities, clothing, food, housing. This burden is a factor in the alimony calculation: a custodial parent who is also receiving child maintenance may be in a different position from a custodial parent whose settlement does not adequately address child-related costs.

In the settlement agreement, child maintenance and spousal alimony should be separately specified — because their tax treatment differs, their conditions for modification differ, and conflating them creates ambiguity.

Factor 7 — Conduct of the Parties

In a mutual consent divorce, conduct is typically less prominent than in a contested case — both parties have agreed to dissolve the marriage without litigating fault. However, where one party’s conduct — cruelty, desertion, adultery — substantially contributed to the breakdown, that conduct may inform the negotiating leverage of the parties even in a mutual consent framework. A spouse who was clearly at fault will typically accept a larger settlement to avoid the reputational and procedural consequences of a contested proceeding.

Conduct of the parties — such as cruelty, desertion, infidelity — is among the eight guiding factors courts should consider when calculating alimony, as established in the 2025 alimony guidelines.

Factor 8 — Inflation and the Cost of Living Over Time

The ruling has underscored the importance of the fact that post-divorce maintenance should mirror the lifestyle of the wife during the period of their married life. Settlements must account for the actual living standards of the parties and the cost of inflation.

The Supreme Court in Rakhi Sadhukhan v. Raja Sadhukhan (May 2025) increased permanent alimony to ₹50,000 per month with a 5% increase every two years, specifically to adjust for inflation and preserve the recipient’s standard of living.

For periodic alimony settlements, the settlement agreement should build in an inflation adjustment — either a fixed annual or biennial percentage increase, or a CPI-linked adjustment. A settlement that feels adequate in 2026 may feel inadequate in 2030 without an inflation clause.

Lump Sum vs. Periodic Alimony: Choosing the Right Structure

One of the most consequential decisions in a mutual consent divorce settlement is whether alimony should be paid as a one-time lump sum, as periodic monthly payments, or as a combination of both. The choice has major implications for both parties — financially, legally, and from a tax perspective.

Lump Sum (One-Time Settlement)

A lump-sum payment involves a single, final transfer of a fixed amount — paid at the time of the second motion hearing, or in instalments over a defined period immediately following the decree.

Advantages for the recipient:

📋 Finality and certainty — the money is received once and does not depend on the payer’s future compliance or financial health

📋 Freedom from ongoing financial dependence on the ex-spouse

📋 Tax-free in the recipient’s hands — a lump-sum alimony paid as a one-time settlement under mutual consent or court decree is treated as a capital receipt and is not taxable in the hands of the recipient, nor is it deductible for the payer under the Income Tax Act, 1961.

📋 Can be invested and managed independently to generate ongoing income

Advantages for the payer:

📋 Certainty and finality — no ongoing obligation, no risk of upward revision

📋 Clean break — the financial relationship with the ex-spouse ends completely on payment

📋 No risk of enforcement proceedings for missed monthly payments

Disadvantages for the recipient:

📋 Requires careful management — a lump sum received today must be invested wisely to generate the income that periodic payments would have provided over years or decades

📋 If received in full before the decree is passed, the recipient’s bargaining position for the second motion weakens

📋 No inflation protection unless the lump sum is sized to account for future inflation from the outset

Structuring lump-sum payments:

Where the full settlement is to be paid as a lump sum but the amount is large, it is commonly structured in instalments — for example, 50% at the first motion and 50% at the second motion, or staggered quarterly instalments over a period of six to twelve months after the decree. This protects the recipient against the payer’s unwillingness to proceed with the second motion after receiving the divorce without payment, and allows the payer to arrange financing across a manageable period.

Periodic Monthly Alimony

Periodic alimony is a fixed monthly payment from the payer to the recipient, continuing for a specified period or for life until remarriage.

Advantages:

📋 Provides ongoing income security — particularly valuable where the recipient is currently financially dependent and needs time to rebuild economic independence

📋 Can be structured to reduce over time as the recipient’s circumstances improve

📋 Easier to negotiate in absolute terms — a monthly number is psychologically easier to agree than a large lump sum that requires the payer to mobilise substantial capital

Disadvantages for the recipient:

📋 Taxable income — if alimony is paid as monthly or periodic maintenance, it is treated as income under the head “Income from Other Sources” in the Income Tax Act. The recipient must include it in their taxable income and pay tax according to their slab.

📋 Dependent on payer’s continued compliance — requires enforcement proceedings if the payer defaults

📋 Subject to revision if either party’s circumstances change materially — upward or downward

Disadvantages for the payer:

📋 Ongoing financial obligation that continues regardless of changes in the payer’s financial circumstances (unless the agreement provides for revision)

📋 No clean break — the financial connection to the ex-spouse continues for years

Combination Structure

The most practical settlement structure in many cases is a combination: a lump sum at or around the time of the decree — providing immediate financial security and the tax advantage of capital receipt treatment — supplemented by a reduced monthly payment for a defined period (three to five years) to provide income during the transition period.

Tax Consequences: What Both Parties Must Know

India does not have a separate statute for the taxation of alimony. Treatment follows general tax principles and judicial interpretation.

The practical tax rules, established through case law and consistently applied:

For the Recipient

📋 Lump sum alimony: Treated as a capital receipt — not taxable. The recipient does not include it in their income tax return. This applies regardless of the size of the lump sum.

📋 Monthly/periodic alimony: Treated as income from other sources — taxable at the recipient’s applicable slab rate. The recipient must include monthly payments in their total income and pay tax accordingly.

📋 Child support: Whether paid as a lump sum or periodically, child support is not taxable in the recipient’s hands — it is treated as welfare for the child, not income for the parent.

📋 Property transfers as alimony: Where immovable property or financial assets (shares, mutual fund units) are transferred as part of the settlement — if the spouse transfers ownership of immovable assets or shares/mutual funds to another spouse as alimony, it will be treated as settlement and not considered as a transfer. Hence Capital Gains tax does not attract at the time of giving alimony, i.e., the transfer of asset.

For the Payer

📋 Alimony payments — lump sum or periodic — are not deductible from the payer’s taxable income. There is no tax relief available to the paying spouse under the Income Tax Act.

📋 Where assets are transferred as settlement, the absence of capital gains tax liability on transfer (as above) benefits the payer — they do not pay tax on the notional gain at the time of transfer.

Planning Implications

The tax asymmetry between lump-sum and periodic alimony has significant structuring implications. A recipient in a high tax bracket who is likely to pay 30% income tax on monthly alimony receives substantially less after-tax value from periodic payments than from an equivalent lump sum. This should inform the negotiation — a lump sum that appears smaller in headline terms may be financially superior to a higher periodic amount subject to tax.

Can Alimony Be Waived Entirely?

A question that frequently arises in mutual consent divorce negotiations — particularly where both parties are financially independent — is whether alimony can be agreed to be zero.

While mutual consent divorce typically involves a one-time settlement, the issue of whether alimony can be completely waived depends on the agreement between the parties. In cases where both parties agree that no alimony is required, the court may grant approval, provided the wife is not in a position of financial need. However, if the wife is financially dependent, she can still claim alimony, even in a mutual consent divorce. The court ensures that no party is left in a state of financial insecurity.

In practice:

📋 Where both spouses are independently employed and financially secure, a court will generally accept a zero-alimony mutual consent settlement — provided both parties affirm freely that they are waiving their alimony claims

📋 Where the wife is financially dependent — no income, no assets, limited employability — courts have been known to express concern about a zero-alimony settlement even in a mutual consent case, though they generally do not override the parties’ agreement in the absence of evidence of coercion

📋 Where the wife has waived alimony in exchange for other settlement benefits — a larger share of property, return of full stridhan, favourable custody terms — the overall settlement package may be adequate even without a named alimony amount

The full and final settlement clause in the agreement should explicitly state that the alimony settled (whether zero or a specific amount) is in full and final satisfaction of all present and future claims under Section 25 HMA, Section 144 BNSS, the Domestic Violence Act, and all other applicable laws.

Stridhan: The Wife’s Absolute Right — Not Alimony

Stridhan is not alimony. The distinction is important and must be clearly maintained in the settlement agreement.

Stridhan — the property given to the wife at the time of marriage by her parents, her in-laws, and other relatives — belongs absolutely to the wife. It is not a settlement or a gift from the husband. The husband has no claim over it, and the wife’s right to its return is not contingent on the settlement terms.

Stridhan typically includes:

📋 Jewellery received by the wife from her natal family and from her in-laws at the time of marriage

📋 Gifts of cash, household items, and valuables received from either side’s family at the time of marriage

📋 Gifts received by the wife personally during the marriage

The settlement agreement should separately list and address stridhan — specifying each item, its estimated value, and the timeline and mechanism of return. Where stridhan items have been lost, sold, or otherwise disposed of, the settlement should address compensation at current market value.

Conflating stridhan return with alimony payment in the settlement agreement creates legal ambiguity and weakens the wife’s position — because it allows the husband to argue that the stridhan has been accounted for in the alimony figure, potentially reducing what the wife actually receives.

The Settlement Agreement: Structuring for Enforceability

The settlement agreement — sometimes called an MoU (Memorandum of Understanding) — is the document that captures all agreed terms of the mutual consent divorce. Once incorporated in the court’s decree, it has the force of a court order and can be executed as such.

Essential Clauses

Alimony clause: Specify the amount (lump sum or monthly), the payment schedule (dates, instalments, bank account details), the conditions for cessation (remarriage, death), and the inflation adjustment mechanism (if any).

Stridhan clause: List every item of stridhan, its estimated current value, and the timeline and mechanism of return. Where items are not returnable, specify the cash compensation.

Property division clause: Identify every significant asset — immovable property by address and survey number, financial accounts by account number and institution, vehicles by registration number — and specify what happens to each. Transfers should be completed within a specified timeline after the decree.

Child maintenance clause: Specify the monthly amount, the payment date, the mechanism of payment, the conditions under which it may be revised (change in custody, change in the child’s needs, change in the payer’s income), and its cessation date (typically when the child reaches majority or completes education).

Withdrawal of litigation clause: List every pending case by case number and court, and specify that each will be withdrawn within a specified period after the decree (typically thirty days).

Full and final settlement clause: A comprehensive release of all present and future claims between the parties arising from the marriage and its dissolution — under Section 25 HMA, Section 144 BNSS, the Domestic Violence Act, and all other applicable laws.

Consequences of default clause: Specify what happens if the paying party defaults on the settlement payments — the right to execute the decree, the right to interest on delayed payments, and the right to seek contempt proceedings.

What Happens If the Settlement Is Not Honoured After the Decree

Once the settlement is incorporated in the divorce decree, it is enforceable as a decree of court. A spouse who defaults on agreed alimony payments can be proceeded against in execution proceedings — property can be attached and sold, bank accounts can be garnished.

The April 2026 Supreme Court ruling explicitly directed the closure of all pending proceedings between the parties — including the domestic violence complaint, maintenance proceedings, and contempt proceedings — on payment of the fixed permanent alimony amount. This illustrates the comprehensive finality that a properly structured settlement achieves: one payment, one decree, all proceedings closed.

Benchmarks: What the Courts Have Awarded

The following recent judicial benchmarks — while applicable to contested cases — inform the negotiating context of mutual consent settlements:

📋 Rakhi Sadhukhan v. Raja Sadhukhan (May 2025): Permanent alimony enhanced to ₹50,000 per month with a 5% increase every two years, plus transfer of the matrimonial home — representing a 2.5× increase over the High Court’s award.

📋 M. v. Leelavathi v. Dr. C.R. Swamy (2025): ₹50,00,000 as one-time settlement for an unemployed wife with advanced academic qualifications, described as a balanced approach to determining alimony.

📋 Article 142 dissolution (April 2026): ₹50 lakh as one-time permanent alimony in full and final settlement of all present and future claims, paid in two instalments, with all pending proceedings closed on payment.

📋 Parveen Kumar Jain v. Anju Jain (2025): ₹5 crores one-time settlement for the wife and ₹1 crore for the son’s financial security, where the husband had deliberately concealed assets.

These are judicial awards in contested proceedings — not benchmarks for all settlements. A mutual consent settlement may be lower or higher depending on the specific circumstances, the parties’ respective financial positions, and the overall composition of the settlement package (a settlement that includes property transfer and full stridhan return alongside a cash amount may be reasonable even where the cash component alone appears modest).

Frequently Asked Questions

Conclusion

Mutual divorce and alimony exist in a legal framework that is simultaneously flexible — because the parties control the terms — and consequential — because the terms they agree on are enforceable for life. The Supreme Court’s recent rulings have raised the bar significantly: marital standard of living is now the explicit benchmark for maintenance, inflation must be factored into periodic alimony, concealment of assets attracts severe judicial consequences, and the financial package must leave no party in genuine financial distress.

For both parties in a mutual consent divorce, the path to a settlement that is fair, final, and free of future dispute runs through five principles: full and honest financial disclosure, understanding of the tax consequences of different payment structures, comprehensive coverage of all assets (not just the named alimony figure), a well-drafted full and final settlement clause, and incorporation of the settlement in the court’s decree rather than leaving it as a private contract.

The settlement negotiation in a mutual consent divorce is the most financially consequential conversation either party will have in the divorce process. It deserves the same preparation, the same legal expertise, and the same attention to detail as any other significant financial transaction.

Disclose fully. Negotiate fairly. Draft comprehensively. Settle finally.

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Aryan Yadav

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