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…
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ITA 2025 · Section 10
Section 10 — APPORTIONMENT OF INCOME (PORTUGUESE CIVIL CODE)
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