Section 10 — Portuguese Civil Code Apportionment

Section 10 — APPORTIONMENT OF INCOME (PORTUGUESE CIVIL CODE)

BLOCK 1 — VERBATIM TEXT OF SECTION 10 (drawn from official PDF)

Marginal note — Apportionment of income between spouses governed by Portuguese Civil Code

If a husband and wife are governed by the community of property system (known as “COMMUNIAO DOS BENS” under the Portuguese Civil Code of 1860) in force in the State of Goa and the Union Territories of Dadra and Nagar Haveli and Daman and Diu, then—

(a) their income under any head of income shall not be assessed together as that of such community of property (whether treated as an association of persons or a body of individuals);

(b) the income mentioned in clause (a) under each head of income other than “Salaries” shall be divided equally between the husband and the wife;

(c) the income so divided shall be included separately in the total income of the husband and the wife respectively, and the remaining provisions of this Act shall apply accordingly; and

(d) where either the husband or the wife, has any income under the head “Salaries”, that income shall be included in the total income of the spouse who has actually earned it. CHAPTER III INCOMES WHICH DO NOT FORM PART OF TOTAL INCOME A.—Incomes not to be included in total income Incomes not included in total income.

BLOCK 2 — 1961 ACT COUNTERPART (Section 5A)

Section 10 of the 2025 Act preserves 1961 s. 5A in substance — the special apportionment rule for spouses in Goa, Daman, Diu and Dadra & Nagar Haveli (regions historically under Portuguese Civil Code's community-of-property regime). The rule mandates 50:50 split of all income other than salary; salary continues to be assessed in the hands of the actually-employed spouse.

BLOCK 3 — COMMENTARY

STATUTORY ARCHITECTURE

Section 10 is a Goa/Daman/Diu/Dadra-Nagar-Haveli specific provision. The Portuguese Civil Code's COMMUNIAO DOS BENS regime treats both spouses as joint owners of all property acquired during the marriage. The Income-tax Act respects this civil-law joint-ownership by mandating 50:50 income-split — except for salary, which is treated as personal earning of the working spouse. The provision is regional and applies only to spouses governed by the said regime — typically by Portuguese-era civil-status registration or by post-1961 election under Goa-Daman-Diu Marriage Act.

JUDICIAL EVOLUTION — Apportionment Mechanics

CIT v. Modu Timblo (Individual), (1994) 206 ITR 647 (Bom HC) — leading authority on s. 5A application. The Court held that the 50:50 split under the Portuguese Civil Code applies to ALL non-salary income — business income, capital gains, rental income, interest, dividend — and is mandatory, not optional. Both spouses are required to file separate returns showing the 50% share.

HELD: The community-of-property regime under the Portuguese Civil Code, when applicable, mandates equal apportionment of all non-salary income. The Income-tax Act respects this civil-law characterisation. Each spouse files a separate return reflecting the 50% share. (per Modu Timblo ¶ 14).

DEPARTMENTAL PRACTICE

CBDT Circular dated 23-08-1986 (legacy) clarified the operation of s. 5A — apportionment is automatic for spouses governed by COMMUNIAO regime; no specific election or form required. ITR-2 / ITR-3 / ITR-4 — separate filings by each spouse showing the 50% apportioned income with reference note in Schedule SPI / OS / BP / CG.

PLANNING NOTES

(i) For Goa-resident clients, verify civil-status registration to confirm whether COMMUNIAO regime applies — pre-1961 marriages typically yes; post-1961 marriages depend on election under Portuguese Civil Code (Application to Goa, Daman and Diu) Act, 1961. (ii) For COMMUNIAO-governed couples, both spouses' returns must show 50:50 split of non-salary income — a unilateral disclosure (e.g., husband alone showing 100%) is incorrect and exposes both spouses to s. 270A misreporting penalty. (iii) For salary income, retain the original employment letter / appointment order — the section preserves salary in the actually-employed spouse's hands. (iv) For business income earned through partnership / firm, the partner-share is split 50:50; this affects Form 3CD audit reporting.

CROSS-REFERENCES

• Section 4 — Charge of income-tax (charge on each spouse's apportioned share).
• Section 5 — Scope of total income (apportioned share part of each spouse's total income).
• Section 96 — Clubbing of income (separate from s. 10 apportionment; s. 10 is civil-code-mandated, s. 96 is statutory clubbing for transfers).
• Goa, Daman and Diu Civil Code (Portuguese Civil Code, 1867) — substantive civil-law foundation.