BIR Ruling

July 10, 1969 Mr. Teofilo C. Barba Division Office Surigao, Surigao del Norte S i r : This is in reply to your letter dated April 11, 1969 inquiring as to the propriety and legality of the deduction claimed by your daughter under Item No. 10, Section B of her income tax return for alleged contributions to the school expenses of her younger brother who is a student, 26 years of age and single. LibLex Pertinent provisions of Section 30 of the Tax Code are quoted as follows: "Section 30. Deduction from Gross Income . In computing net income, there shall be allowed as deductions "xxx xxx xxx "(h) Charitable and other contributions or gifts actually paid or made within the taxable year to or for the use of the Government of the Philippines or any political subdivision thereof for exclusively public purposes, or to domestic corporations or associations organized and operated exclusively for religious, charitable, scientific, athletic, cultural or educational purposes or for the rehabilitation of veterans, or to societies for the prevention of cruelty to children or animals, no part of the net income of which inures to the benefit of any private stockholder or individual to an amount not in excess of six per centum in the case of an individual, and three per centum in the case of a corporation, of the taxpayer's taxable net income as computed without the benefit of this paragraph. Such contribution or gift shall be allowable as deductions only if verified by the Secretary of Finance." (Emphasis supplied) Under the aforequoted provision of law, the taxpayer may deduct contributions made to domestic corporations or associations organized and operated exclusively for religious, charitable, scientific, athletic, cultural or educational purposes, or for the prevention of cruelty to the children or animals, provided that no income of said corporations or associations is distributed to any private stockholder or individual. Contributions made to the Government or any of its political subdivisions are likewise deductible if such contributions are made for exclusively public purposes. However, contributions to individuals, even if made for any of the aforementioned objectives, are not deductible for income tax purposes. In view of the foregoing, this Office is of the opinion and so holds that the alleged contributions made or given by your daughter for the school expenses of your son are not deductible from her annual gross income. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue