BIR Ruling

September 9, 1968 Mrs. Josefina de G. Conlu c/o Bureau of Mines Herran Street, Manila M a d a m : This refers to your letter dated April 24, 1968 requesting a ruling on a query stated as follows: "The undersigned is an employee in the Bureau of Mines. We have been informed that effective May, 1968, withholding tax shall be deducted from our salaries. Information is hereby requested whether said deduction is proper and lawful under the following circumstances: "I am a married woman with four (4) dependents. My salary is P2544 p.a. My husband who is also employed in the Bureau of Mines receives a salary of P5100.00 p.a. Every year we file our joint income tax return. When combined our total gross income is P7644 p.a. After deducting 10% which P764.40, as standard deduction the net is P6879.60 which is less than the total exemption of P7,000.00 (P3,000.00 as head of the family and P4,000.00 for dependents)." In reply, I have the honor to inform you as follows: For the purpose of the provisions of the withholding tax on wages, when both husband and wife are the recipients of wages from the same or different employers, in the determination of the tax to be withheld, the husband is deemed to be the head of the family and entitled to the additional exemptions for the dependent children. However, the tax on wages of the wife, is determined by using the zero exemption in the withholding tax table. (Section 16, Revenue Regulations No. V-8, as amended by Revenue Regulations No. V-70) A different procedure is however applied where a husband and wife have a common employer. In such a case, their wages may be aggregated and the tax ascertained on the basis thereof after deducting from said income personal exemptions provided for in the law. Being married with four dependent children, no tax is due on your aggregate income. In view thereof, this Office believes and so holds that inasmuch as under your representation, you and your husband's joint net taxable income is less than your total exemption, you are exempt from the payment of income tax and consequently, from withholding tax. lexlib Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue