If you live in the state of Goa or in the Union territories of Daman or Dadra Nagar Haveli, today, we’re going to give you a code that will let you cut your tax bill in half. And we’ll tell you how to activate it at the new income tax portal. Let’s build your own wealth,
With this code, you’ll save lakhs of rupees in taxes and build your own wealth. Today, we’ll discuss the Potuguese Civil Code, which is a step towards pay equality. According to this code, whatever income a husband and a wife have, apart from the income from salary from employment, all other income shall be a portion between the husband and wife equally.
So, for example, if Tom is a resident of a state of Goa, he earns a profit of Rs. 10 lakh rupees from his business, and his wife Melissa is a stay at home mom, then the entire income of Rs. 10 lakh will be apportioned equally between Mr. D’Souza and Mrs. D’Souza. This means they’ll both be tagged at Rs. 5 lakhs. Isn’t it amazing? And at 5 lakh rupees, you don’t have to pay any taxes on your income. So, on an income of 10 lakh rupees, you’re not paying any taxes.
Isn’t it really great? How is it possible? Let’s discuss. As per Section 5A of the Income Tax Act and Portuguese Civil Code rules, income earned by the husband and that by the wife is an equal portion between the spouses irrespective of whether only one spouse is the breadwinner and the other is a homemaker. The income that you apportion equally between the two spouses will get clubbed into the total income of each spouse, and they have to pay tax individually on their total income when they file their income tax return.
However, salary income from employment is not included under this provision. So if you are a resident of the state of Goa or Union territories of Daman or Dadra Nagar Haveli and you are earning an income from running a business or earning interest from apps that you have saved, all of this income will get apportioned equally between the husband and the wife, and will be considered their total income, which they have to report when they file their individual income tax returns.
Regardless of your religion or car, if you are a resident of any of these places, this provision is applicable to you, and the due date of filing the income tax returns of both the spouses will be the due date of filing the return of the earning member. And if Mr. D’Souza is running his business as a partnership firm and the tax audit is also applicable to him as a partner, then, for him, the due date for filing the income tax return is the extended due date of filing when the tax audit is applicable.
Now, the due date for filing the income tax return is 31 October. I also have a separate blog on the extended due dates of filing income tax return. So even Mrs. D’Souza, who’s essentially a homemaker, is entitled to 50% of the earnings of Mr. D’Souza. As a resident of the State of Goa, under the Portuguese Civil Code, her due date would also be the same as that of Mr. D’Souza for filing the income tax return.
But you’ll have to make a small change in your income tax profile to make this clause applicable to you. Okay. Go to My System. To be able to update your Portuguese Civil Code status, you’ll need to open your web browser, go to Google, and then type in the URL of the new income tax portal, which is incometax.gov.in. Then click on Login at the top right corner of the portal, and enter your PAN card number as your user ID and the password that you used at the old income tax portal.
When you click on continue, it will ask you to confirm the secure access message and update the password. If you don’t remember your password, you can also log in using OTP. If you haven’t yet enabled the login through OTP feature, here’s my blog on how to do that.
Now, you’ll be taken to a welcome screen. Now if you scroll a little, you’ll see the option to update your profile. For this, you’ll need to click on “Update Profile”. This will take you to another screen where, on the left, you’ll see many options to update your profile. One of these will mention the Portuguese Civil Code applicability.
If you click on this, it will take you to a screen where you’ll be able to update whether the Portuguese Civil code is applicable to you. So if you live in the state of Goa or in the Union territories of Daman or Dadra Nagar Haveli, then this code is applicable to you and you need to click on “Yes”. If you’re not staying in these places, then you have to click on “No”, and then click on “Add”. So after clicking on “Yes”, go ahead and update the PAN details of your spouse to link your income and other details. Click on “Now” and then click on “Add”, and it will tell you that your videos are successfully updated.
I hope you found this information helpful and were able to update this code correctly. If you live in the state of Goa or in the Union territories of Daman or Dadra Nagar Haveli, this is a great option to save your taxes because this way, your entire income will be divided equally between you and your partner.