Why is Portuguese Civil Code Applicability Asked in the ITR

While filing the income tax return, individuals may have come across the field ‘Are you governed by Portuguese Civil Code under Section 5A‘. The income tax return requires you to submit such details because there are different tax implications for the individuals governed by the Portuguese Civil Code.

Let us know more about the applicability of the Portuguese Civil Code and its tax implications:

What is the Portuguese Civil Code?

India has a common-law jurisdiction, marriage is not a contract, and any contract in relation to marriage is considered void.

Goa has its code different from the rest of India – the Goa Civil Code, also known as Goa family law, which follows the Portuguese Civil Code. The law applies to every person residing in the area where this is applicable irrespective of the person’s religion.

There are four different marriage options under the law: 

• Community property 
• The absolute separation of property 
• Separation of assets existing before marriage and communion of the property after marriage 
• Dotal regime 

If no option is chosen for marriage by any express contract, the community property law is automatically applicable.

The community property law states that the total assets (and liabilities) possessed by the spouse before marriage and those obtained by inheritance gets blended into the community property. Each spouse becomes entitled to a 50% share in the said property. 

Similarly, 50% income of each spouse belongs to the other spouse.

Such assets may not be disposed of or encumbered by one spouse without the express consent of the other.

Who is governed under the Portuguese Civil Code Law

The Portuguese Civil Law is applicable only in Goa and; the Union Territories of Daman and Diu and; Dadra and Nagar Haveli. 

What is Section 5A provision of the Income Tax Act?

The income tax provisions for such individuals (Portuguese Civil Code applicable) states that the income of husband and wife shall be equally apportioned between them under each head of income of the Income Tax Act (except the salary income). 

The income so apportioned between them shall be added separately in the total income of the husband and wife. 

Each spouse should disclose only their share of income in their individual income tax returns.

Also, where the husband or wife, governed by the community property system, has earned income from salary, the one earning such income shall include it in his/her total income, i.e. salary income is not divided and added in the spouse’s income.

Update the applicability of the Portuguese Civil Code in the new income tax portal.

Step 1: Log in to the income tax portal at www.incometax.gov.in

Step 2: Go to ‘My Profile’ from the top right corner.

Step 3: In the ‘My Profile’ page, scroll down below, and click on the ‘Portuguese Civil Code Applicability’ option in the left pane.

Step 4: The income tax portal will ask you whether the Portuguese Civil Code applies to you or not.

Step 5: Select ‘Yes’ if you are a resident of Goa and the Union Territories of Dadra and Nagar Haveli and Daman and Dui. Otherwise, select option ‘No’.
 

Step 6: If you select ‘Yes’, enter the PAN and Aadhaar number of your spouse in the relevant fields below.

Step 7: Next, click on the ‘Add’ button, and your income will be linked with your spouse’s PAN.

If you are someone to whom the Portuguese Civil Law is applicable, update your profile in the new income tax portal as explained above. It will benefit you to divide your entire income equally between you and your spouse. 

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