Reader's corner: How to divide jointly-held shares at the time of divorce?

My wife and I have a few equity shares in various companies. They are in demat form with a private-sector bank. My wife's name comes first, and mines comes second. According to the proposed consent terms in the divorce agreement, we have decided to divide the holdings with each of us getting 50 per cent of the shares held in each company through a gift deed from my wife. Should the gift deed be executed and the shares transferred in my name before the filing of our divorce petition in the family court so that it is not taxable in my hands, or can it be done even after the filing but before the decree? I want to ensure that the value of the transferred shares is not treated by the IT Department as my income and taxed. 

It would be best for both of you if you can complete the distribution of assets amongst yourselves amicably, happily, and importantly, before the decree. I do not even see the need for a gift deed for this purpose. So, if you have not yet filed your divorce petition, I would recommend that you complete the distribution of all financial assets via sale and then an exchange of cheques. Where possible, transfer half the asset directly. In case of shares, transfer them from joint demat account to your demat accounts respectively. Then close all the joint accounts. After all that is done, file your divorce petition. This will save you a lot of hassles later. 

How do I invest? Rs 5 lakh for starting a portfolio for the long term and with the intention of wealth creation? I want to start by saving ? Rs 15,000 monthly. What are my investment options? I am a part-time worker and full-time student.

It would be best if you started with one or two equity-oriented multi-cap mutual fund schemes. I see the equity market as the best option for long-term wealth creation. A monthly investment of Rs 15,000 done for 25 years can easily create wealth to the tune of Rs 5 crore. The only way you can accomplish this is by being regular and disciplined. It is a voluntary investment, so don't withdraw if you do not make money for a few years.

I am a single mother of three and a lawyer. I have an income of Rs 7 lakh. My staff salary is Rs 3 lakh. I have a monthly expense of Rs 3.5 lakh as all my children study abroad. How much do I need to save every month for retirement? I am 53, and I plan to retire at 75.

I am going forward with the assumption that you will need Rs 50,000 in today's value per month to support yourself if you are retired and that your children are independent. To help yourself for years of your life after 75, you might be comfortable with a corpus of approximately Rs 5 crore. So, in the 22 years that you have between now and your proposed retirement age, you will need to invest Rs 40,000 monthly in a diversified equity-oriented mutual fund. 

I pay a monthly rent of Rs 27,000—Rs 20,000 in cheque and the rest in cash. The rent agreement is in my name. I have informed my employer. they give me income tax benefit on the House Rent Allowance (HRA) paid to me with the salary for cheque component. Do I need to deduct any income tax on the payments made to the landlord?

Yes, you need to deduct tax from the rent you pay to the owner of the property. The rule is that if you pay rent of more than Rs 50,000 per month or if you're likely to pay rent above Rs 1,80,000 in a year, then you have to deduct text at the rate of 10 per cent. In your case, you will have to deduct Rs 2,000 as tax and pay that to the government. You can then pay Rs 18,000 to the flat owner.
The writer is director, Transcend Consulting. The views expressed are the expert’s own. Send your queries to

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