**Policy Summary: Repeal of Subsection 2 of Section 5A of the Income Tax Act, 1961**
This document summarizes Lok Sabha Unstarred Question No. 2386, addressed to the Minister of Finance on August 4, 2025, regarding the potential repeal of subsection 2 of Section 5A of the Income Tax Act, 1961, concerning the apportionment of salary income between spouses in Goa under the 'Comuniao dos Bens' of the Portuguese Civil Code.
The inquiry sought clarification on whether, prior to the insertion of Section 5A, salary income in Goa was equally apportioned between spouses. It also questioned the rationale for excluding salary income from apportionment via subsection 2 of Section 5A and the justification for the differential treatment of salaried individuals compared to other assessees under the Portuguese Civil Code. Finally, it asked if the government was considering repealing subsection 2 of Section 5A to ensure equitable tax treatment for salaried individuals in Goa.
The Minister of State for Finance, Shri Pankaj Chaudhary, responded that prior to the insertion of Section 5A (introduced by the Finance Act, 1994, with retrospective effect from April 1, 1963), salary income was not subject to equal apportionment. The response clarified that Section 5A(2) applies universally, and the non-apportionment of salary income is based on its individual-specific nature. As of August 4, 2025, there is no official proposal under consideration to repeal subsection 2 of Section 5A of the Income-tax Act, 1961.
Key Entities Referenced
Ministry of Finance: The ministry responsible for financial matters of the Government of India.
Department of Revenue: A department within the Ministry of Finance.
Lok Sabha: The lower house of the Parliament of India, where the question was raised.
Captain Viriato Fernandes: The Member of Parliament who raised the unstarred question.
Income Tax Act, 1961: The principal act governing income tax in India.
Section 5A: A specific section of the Income Tax Act, 1961, concerning income apportionment in Goa.
Goa: A state in India to which the policy specifically applies due to the Portuguese Civil Code.
Portuguese Civil Code: The civil code applicable in Goa, specifically the 'Comunio dos Bens' regarding property rights of spouses.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
LOK SABHA UNSTARRED QUESTION NO. 2386
TO BE ANSWERED ON MONDAY, AUGUST 04, 2025/SRAVANA 13, 1947 (SAKA)
REPEAL OF SUB-SECTION (2) OF SECTION 5A OF IT ACT
2386. Shri. Captain Viriato Fernandes:
Will the Minister of FINANCE be pleased to state:-
(a) whether prior to the insertion of Section 5A in the Income Tax Act, 1961, income from salaries was
apportioned equally between spouses in the State of Goa governed by the ‘Comunião dos Bens’ of the
Portuguese Civil Code;
(b) if so, the specific reasons and legislative intent for excluding salary income from such apportionment
through the insertion of sub-section (2) of Section 5A;
(c) the Government’s justification for continuing this differential treatment, discriminating the salaried
individuals as other assessees are still governed by the same Portuguese Civil Code; and
(d) whether the Government is considering repealing sub-section (2) of Section 5A to provide equitable tax
treatment to salaried persons in Goa and if so, the details thereof?”
ANSWER
MINISTER OF STATE FOR FINANCE
(SHRI PANKAJ CHAUDHARY)
(a)
No, prior to the insertion of Section 5A in the Income Tax Act, 1961 (the Act) by Finance Act, 1994
with retrospective effect from 01.04.1963, income from salary was not subject to equal apportionment
between spouses in the State of Goa governed by the 'Comuniao dos Bens' of the Portuguese Civil Code
for the purposes of the Act.
(b)
Not applicable in view of reply at (a).
(c)
The Section 5A (2) of the Act is applicable to all assessees. Only the income under the head salary
of any assessee is not apportioned as this is unique to each person who has earned it.
(d)
At present, there is no official proposal under consideration to repeal sub-section (2) of Section 5A
of the Income-tax Act, 1961.
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