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Section 5A : Portuguese Civil Code in Income Tax Return

Portuguese Civil Code in Income Tax

The Portuguese Civil Code deals in the apportionment of income between spouses. The Portuguese Civil Code is applicable only to the state of Goa and the Union territories of Dadra & Nagar Haveli and Daman & Diu. If you are not governed by the laws of these places, you should select “No” for this question. However, in case you are governed by the laws of any of these places, you should select “Yes”.

As per this code, whatever income is earned by the husband and the wife from all sources (except Salary Income from employment) shall be apportioned equally between both the spouses. The income so apportioned shall be added to the total income of each spouse separately and each spouse should disclose only his/her share of income in the Income Tax Return.

As per Section 5A of the Income Tax Act, all incomes of individuals governed by the Portuguese Civil Code are taxed in this manner except Income from salary earned form the employer. Salary Income is not apportioned to both the spouses and is only the income of the person who has earned it.

Legal Provisions:

5A. (1) Where the husband and wife are governed by the system of community of property (known under the Portuguese Civil Code of 1860 as “COMMUNIAO DOS BENS”) in force in the State of Goa and in the Union territories of Dadra and Nagar Haveli and Daman and Diu, the income of the husband and of the wife under any head of income shall not be assessed as that of such community of property (whether treated as an association of persons or a body of individuals), but such income of the husband and of the wife under each head of income (other than under the head “Salaries”) shall be apportioned equally between the husband and the wife and the income so apportioned shall be included separately in the total income of the husband and of the wife respectively, and the remaining provisions of this Act shall apply accordingly.

(2) Where the husband or, as the case may be, the wife governed by the aforesaid system of community of property has any income under the head “Salaries”, such income shall be included in the total income of the spouse who has actually earned it.

Also Read: CBDT revealed new income tax e-filing website’s features

Marriages under the Portuguese Civil Code

Under the Portuguese Civil Code, there are 4 laws governing marriage:-

  • Community Law Property
  • Absolute Separation of Property
  • Separation of Assets existing prior to marriage and communion of the property after marriage
  • Dotal Regime

Whenever no express contract was made, the Law of Community Property is deemed to be applicable under the Portuguese Civil Code. And therefore, 98% of marriages are governed by the Community Property Law.

As per the Community Property Law, each spouse automatically acquires joint ownership of all assets already in their possession as well as those due to them by inheritance. In other words, the total no. of assets (and liabilities) that a person brings into a marriage come under the purview of Community property.

And these assets may not be disposed of or encumbered in any way by one spouse without the express consent of the other. In this way, women are protected under the law by husbands who might otherwise do as they please with the assets. And this is a benefit, which a majority of the Indian women don’t have as the Portuguese Civil Code is applicable only in the state of Goa and the union territories of Dadra & Nagar Haveli and Daman & Dui.

Even though India has different civil laws for different religious communities, the Portuguese Civil Code applies to everyone residing in the area in which this is applicable regardless of the religion of the person.

These places were ruled by the Portuguese for more than 400 years and it was only in 1961 that these places were liberated from Portugal’s rule by the Indian Army. After 1961, all Portugal Laws lapsed and Indian Parliament extended its laws to these states as well. However, some laws like the Portuguese Civil Law were not repelled and still continue to be in existence.

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