Portuguese Civil Code ITR2

To report income under the Portuguese Civil Code (governed by Section 5A of the Income Tax Act) in ITR-2, you must follow the specific apportionment rules that treat non-salary income as belonging equally to both spouses.

1. Enable Portuguese Civil Code Applicability

Before filing, you must ensure your profile is updated to reflect this:

• Log in to the e-Filing portal.

• Navigate to My Profile > Portuguese Civil Code Applicability.

• Select Yes (applicable to residents of Goa, Daman and Diu, and Dadra and Nagar Haveli).

• Enter your spouse’s PAN and Aadhaar details to link your profiles.

2. Filling Schedule 5A

This is the primary schedule for your situation.

• In Schedule 5A, provide the details of your spouse as requested.

• The system will require you to apportion income (excluding salary) under various heads: House Property, Capital Gains, and Other Sources (which includes interest and dividends).

• For each head, you must disclose:

  • Total Receipts: The full amount earned.

  • Portion Apportioned to Spouse: The 50% share belonging to your spouse.

  • TDS Details: The total TDS deducted on the income and the share of TDS to be attributed to your spouse.

3. Reporting Interest and Dividend Income

• Other Sources: Enter your share of the interest and dividend income in the "Income from Other Sources" schedule. Since Section 5A mandates a 50/50 split for non-salary income, you should generally report only your 50% share in your respective ITRs.

• TDS on Interest/Dividends: In the Schedule TDS section, you will see the TDS deducted. You must allocate the TDS credit in proportion to the income reported. If you are reporting 50% of the income, claim 50% of the TDS credit, and ensure your spouse reports the remaining 50% of the income and claims the corresponding 50% of the TDS credit in their own ITR.

Summary of Steps

1. Update Profile: Set "Portuguese Civil Code Applicability" to "Yes" and link your spouse's PAN.

2. Apportionment: In Schedule 5A, enter total income and specify the 50% split for each head (Interest, Dividends, etc.).

3. Reporting: Report only your 50% share of income in the relevant income schedules (e.g., Other Sources).

4. TDS: Allocate 50% of the TDS to yourself and 50% to your spouse in the TDS schedules to match the income distribution.

Disclaimer: This guidance is based on general tax procedures for Section 5A. For complex cases or specific discrepancies in auto-populated data, it is recommended to consult a Chartered Accountant.

Summary: To report income under the Portuguese Civil Code in ITR-2, update your e-Filing profile to enable "Portuguese Civil Code Applicability" and link your spouse's PAN. In Schedule 5A, apportion your non-salary income (interest/dividends) equally (50% each) between spouses. Report your 50% share in the respective income schedules and claim 50% of the corresponding TDS credit, ensuring your spouse reports their half and claims the remaining 50% of the TDS.