Are you subject to Portuguese Civil Code u/s 5A? If so, one must submit under that section and learn how to update and declare during ITR filing?
Section 5A of Income Tax Act 1961 covers the Apportionment of income between spouses governed by Portuguese Civil Code.
This document covers
- What is Portuguese Civil Code?
- Applicability of Portuguese Civil Code
- How to update applicability of Portuguese Civil Code in Income Tax portal?
- How to disclose Portuguese Civil code in Income Tax Return?
1. What is Portuguese Civil Code
Where the husband and wife are governed by the system of community of property, Portuguese civil code applies. This is known as COMMUNIAO DOS BENS under the Portuguese Civil Code of 1860. As per Portuguese Civil Code, Income will be apportioned between husband and wife.
- Income under any head of Income except Salaries (House property, Capital gains, business/profession and other sources): The income of the husband and wife from House Property, Capital Gains, Business/Profession and other sources will be apportioned equally between husband and wife and each of them needs to disclose their share of income in their Income Tax Returns
Example: Anthony and Rachel are residents of Goa and Anthony has house property in Goa and earn Rental Income of Rs 10 lakhs. Even though the property is in Anthony’s name, rental income needs to be apportioned between Anthony and Rachel in the equal ratio as they are residents of Goa. Hence MR Anthony needs to show Rs 5 lakhs as rental income and Rachel needs to show Rs 5 lakhs as rental income in their tax returns.
- Income under the head "Salaries" : If the husband or wife who is governed by Portuguese civil code earns Salary income , it will not be apportioned between the wife and husband. The Salary income will be taxable in the hands of spouse who actually earns it.
Example: In the above example, If Rachel is earning a Salary of Rs 5 lakhs, this will be taxable in the hands of Rachel only
Note: The losses and TDS will also be equally apportioned between the spouse as per section 5A of Income Tax Act 1961
2. Applicability of Portuguese Civil Code
Portuguese Civil Code is applicable to the following states
- Dadra and Nagar Haveli (Union Territory)
- Daman & Diu (Union Territory)
3. How to update applicability of Portuguese Civil Code in Income Tax portal?
- Login to https://eportal.incometax.gov.in/iec/
- Go to my profile and click on Portuguese Civil Code Applicability on the left hand side of the page
- Click on Yes for the question Are you governed by Portuguese Civil Code as per section 5A?
- Enter the PAN and Aadhaar of the Spouse and click on Add
- Once added, the income will be linked with Spouse PAN
IMPORTANT NOTE: Even if you are e-filing with EZTax.in the above Step #3 is mandatory.
4. How to disclose Portuguese Civil code in Income Tax Return?
- While filing income tax return, the taxpayers need to select "Are you governed by Portuguese Civil Code u/s 5A"? as "Yes"
- When efiling with EZTax, above question need to be addressed in the personal information page.
- The taxpayer is also required to fill Schedule 5A in the income tax return . The details to be given in Schedule 5A are as follows
- Name, PAN and Aadhar of Spouse
- The breakup of incomes needs to be given in the following format
- When e-filing with EZTax.in portal the system will automatically bifurcate between spouse and taxpayer.
|S.No||Receipts Received||Amount apportioned in the hands of spouse||Amount of TDS deducted||TDS apportioned in the hands of spouse|