BIR Ruling [DA-004-01]

January 16, 2001 BIR RULING [DA-004-01] R.A. 7432; RR 2-94; 058-97 Mr . Amador F . Flaminiano Blk. 9, Lot 1, Soldier Hills Subd. III Tala, Caloocan City S i r : This refers to your letter dated August 11, 2000 requesting for exemption under R.A. 7432, otherwise known as the "Senior Citizens Act". It is represented that you are a senior citizen; that you are employed as a College instructor at the Immaculada Concepcion Colleges, Caloocan Branch; that you are receiving an annual salary not exceeding Sixty Thousand (P60,000.00); and that your employer withheld taxes from your salary. In reply, please be informed that Section 3 of Revenue Regulations No. 2-94 implementing Section 4 of R.A. 7432, otherwise known as the "Senior Citizens Act," provides as follows: "SEC. 3. INCOME TAX BENEFIT AND PRIVILEGES FOR THE SENIOR CITIZENS . Senior citizens qualified as such by the Commissioner of Internal Revenue or his duly authorized representative, who, for purposes of these regulations, is the Regional Director of the Revenue Region having jurisdiction of the city or municipality where they are permanent residents, shall be entitled to the following tax benefit and privileges: "a. Exemption from the payment of individual income tax provided that their annual taxable income does not exceed the poverty level of P60,000.00 or such amount as may be determined by the NEDA for a certain taxable year. xxx xxx xxx Furthermore, Sections 5 and 6 of the same Regulations provides as follows: SEC. 5. AVAILMENT OF INCOME TAX EXEMPTION . A senior citizen who shall avail of the exemption from income tax is required to submit the following documents to the Revenue District Officer (RDO) of the place where he is a permanent resident, who shall make the necessary verification and report for purposes of the income tax exemption to be issued by the Commissioner of Internal Revenue or his duly authorized representative: A. Certified true copy of his Birth Certificate/Baptismal Certificate or in the absence thereof, a certification from the National Statistics and Census Bureau or an affidavit by two (2) disinterested credible persons who know personally the senior citizen; B. If he has a benefactor as defined in Section (f) of these Regulations, Certification as to the name, address, occupation, Office or business address (office/business) and TIN of his benefactor; C. If employed, a copy of his withholding tax statement (BIR Form W-2) for the preceding taxable year; c.1. a senior citizen who derives taxable (fixed) compensation income from only one employer in an amount not exceeding P60,000 per annum shall be exempt from income tax and consequently from the withholding tax prescribed under Section 72, Chapter 10, Title II of the National Internal Revenue Code, as amended. D. If self-employed, (i.e. practice of profession, or in business as single proprietorship) a copy of his income tax return (ITR) for the preceding taxable year together with the annual license or permit issued by the city or municipality where he has his principal place of business, supported by a copy of his declaration of sales or income. d.1. A senior citizen who derives taxable compensation income from two (2) or more employers, or who receives mixed income from employment and from business shall still file an income tax return. Such being the case, senior citizens whose annual taxable compensation income from only one employer does not exceed the poverty level of P60,000.00 or such amount as may be determined by the NEDA for a certain taxable year shall be exempt from the payment of individual income tax and consequently from the withholding tax and his exemption shall be determined by the Regional Director of the Revenue Region having jurisdiction of the city or municipality where the senior citizen is a permanent resident in accordance with the aforequoted provisions of Sec. 5 of RR No. 2-94 in relation to Secs. 3 and 6 of the same Regulations. (BIR Ruling No. 058-97 dated May 15, 1997) Thus, in view of the foregoing, your income as a College instructor in Immaculada Concepcion Colleges, Caloocan Branch is exempt from income tax and consequently from the withholding tax under Section 79 of the Tax Code of 1997 provided your annual income does not exceed Sixty Thousand Pesos (P60,000.00) or such amount as may be determined by the NEDA for a certain taxable year. TAEcCS Moreover, you may claim for a refund of the taxes withheld from your income provided, you file a written claim for refund within two years from the date of filing your income tax return pursuant to Section 204 (C) of the Tax Code of 1997. This, however, is subject to the findings of the Regional Director, of the Revenue Region which has jurisdiction over your claim, on the propriety of your claim. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, (SGD.) LILIAN B. HEFTI Deputy Commissioner Legal and Inspection Group