What is Portuguese Civil Code?
The Portuguese Civil Code in India is applicable only to the state of Goa and the Union territories of Dadra & Nagar Haveli and Daman & Dui.
As per the Portuguese Civil Code, Income earned by the husband and the wife from all sources 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.
Exception to this rule: According to Section 5A of the Income Tax Act Income from salary earned form the employer is not apportioned to both the spouses and is only the income of the person who has earned it.
How to select Portuguese Civil Code in Software?
In Client Master, if the Residence Address/Office Address is of the state of Goa and the Union territories of Dadra & Nagar Haveli and Daman & Dui, only then the Software will enable the option in Transactions>>Governed by Portuguese Civil Code u/s 5A as shown below.
After clicking on the above option, the schedule for section 5A will get enabled as shown below and then it can filled according to the income.
Note: If the Place of residence of taxpayer has changed to the state of Goa and the Union territories of Dadra & Nagar Haveli and Daman & Dui in the current year, then in that case, User should Edit the client master.
Master>>Client Master>>Edit Client>>Delete (this should be blank, if there is any year in drop down select that and delete)
Now, click on Master radio button and update the residence as well as office address.
Hope it clarifies how to Opt Yes for “Are you governed by the Portuguese Civil Code?” question in ITR and fill the applicable schedule.