BIR Ruling

May 28, 1973 Iligan Cement Corporation 2nd Floor, Zaragosa Bldg. 2281 Pasong Tamo Extension Makati, Rizal Attention: Mr . Luis A . del Rosario, Jr . Executive Assistant Gentlemen : In reply to your letter dated May 5, 1973, I have the honor to inform you that since the proviso of Section 23(c) of the Tax Code as amended by Presidential Decree No. 69 is of prospective application, your employees who have more than four (4) qualified dependent children as of December 31, 1972 can continue to claim the additional exemption for the total number of such dependents for the calendar year beginning January 1, 1973, and subsequent years provided that as of end of said calendar years such dependents meet the requirements enumerated in Section 23(c) of the Tax Code as amended by Presidential Decree No. 69 which for your reference and guidance, is quoted hereunder as follows: "(c) Additional exemption of dependents . The sum of one thousand for each legitimate, recognized natural, or adopted child, wholly dependent upon and living with the taxpayer if such dependents are not more than twenty-one years of age, unmarried, and not gainfully employed or incapable of self-support because mentally or physically defective. The additional exemption under this subsection shall be allowed only if the person making the return is the head of the family. Provided, however, That the total number of dependents for which additional exemptions may be claimed shall not exceed four dependents." In the light of the foregoing, and in accordance with the withholding table prepared by the Secretary of Finance, which is Revenue Regulations No. V-8 as amended by Revenue Regulations No. 70, corresponding adjustment in the withholding of Income tax should be made by your Office on the salaries of employees, particularly on those whose number of dependent children is reduced to the fact that one or more of such dependent children are already more than twenty-one (21) years old. (See B.I.R. Ruling No. 73-013 dated April 16, 1973). Very truly yours, (SGD.) CONRADO P. DIAZ Acting Commissioner of Internal Revenue