MONEY TODAY

Dividing the Family Silver

Chandralekha Mukerji Print Edition: March 2013

Your marriage may have failed but don't discard the wedding
photographs as bad memories. These can be legal evidence of who owns
the jewellery that you are wearing in these photographs.

Unlike property, where ownership is decided on the basis of who has

paid for it, jewellery belongs to the person who uses it, that is, the wife.
She just has to produce these pictures in the court to prove that the
jewellery is part of her 'streedhan'.

Streedhan is assets within a marital household over which only the wife
has ownership. This includes everything bought by her or given to her
before marriage, at marriage or during the period she is married. Also, it
can come from anyone-parents, husband, inlaws, relatives and friends,
or husband's relatives and friends.

However, there can be exceptions.

Let's see who will be the rightful owner of jewellery (includes ornaments
made of gold, silver, platinum or any other precious metal, stone or any
alloy) and valuables such as paintings/artifacts in some
common divorce-related situations.

Gifts Received

The definition of gifting is simple. It means transfer of ownership. It does

not matter who the gift comes from. It belongs to the person to whom it
has been presented. So, if any family jewellery is gifted to the wife, it is
streedhan, while a car gifted to the husband at the time of marriage is
his.

Usually, oral statements are enough. However, ownership can be proved by showing
photographs of the person wearing the ornament,
ANUPAM SRIVASTAVA
Partner, The Chambers of Law

In case of jewellery, apart from a few items such as the husband's

wedding ring or, say, a gold chain given to him, all items are assumed to
have been gifted to the wife.

Between husband and wife, it is obvious that the jewellery belongs to the
wife. But controversy arises when the couple stays in a joint family. In
such a case, the husband can claim that the jewellery doesn't belong to
the wife but to, say, the mother-in-law or the sister-in-law.

DIVORCE WOES:How to split money amicably

Unlike in immovable property such as a house, one doesn't need a gift

deed to prove ownership. "Usually, oral statements are enough to decide
who owns the jewellery. However, in cases where one has to prove
ownership in court, it can be done by showing photographs of the person
wearing the ornament," says Anupam Srivastava, partner, The Chambers
of Law, a New Delhibased law firm.

Other valuables such as a painting or, say, a silver set, received as

gifts by the couple together are considered joint property. So, these
should be divided equally. "Valuables gifted to the couple at the time of
marriage belong to both and can be divided according to Section 27 of
the Hindu Marriage Act, 1955*," says Anju Tyagi, Associate Professor
(Law), National Law University, New Delhi.

If one person wants to keep a jointly-held gift, he/she can buy out the
spouse.

Inherited Ornaments

Jewellery inherited by the

wife is hers. Similarly, a
valuable inherited by the
husband is his. But
anything passed on to the
wife from the mother-in-
law belongs to her.

In cases where some

family jewellery has been
given to the wife, there
are chances that the
husband's family may
want it back. In such a
situation, the parties can
enter into an agreement.
"In a mutual-consent
divorce, there can be any
adjustment. The wife can
agree to return the item
or the husband can pay
the wife for returning the
jewellery piece," says Srivastava. The same rules apply if the husband has
received any valuable from the wife's family.

Items Purchased

Just like jointly-received gifts, valuables bought jointly are treated as

shared. However, jewellery purchased by the husband or paid for from a
joint bank account, even for investment purposes, is assumed as 'bought
for the wife' and a part of 'streedhan'. In that case, the husband would
not have legal right on it. Similarly, if the wife has bought any jewellery
item, say, a ring, for the husband, it will be treated as his.

DIVORCE WOES:How to split property fairly

Though the wife would have the legal right to keep most of the jewellery,
any arrangement that is suitable to both the parties is acceptable in a
mutual-consent divorce.

Tax Treatment

If the woman sells a portion of the 'streedhan' (including any inherited

item) after the divorce, the profit earned will invite capital gains tax. The
tax will apply on the husband's portion of the gift as well. In case of
inherited items, the holding period for calculation of capital gains will
also include the period for which the asset was held by the previous
owner.

*The print version of this story had erroneously said that the Hindu
Marriage Act was passed in 1995. It has been corrected to 1955.