BIR Ruling [DA-194-01]

October 17, 2001 BIR RULING [DA-194-01] Mr. Pepito A. Gonzales Certified Public Accountant Blk. 2 Lot 26 Melon Drive SM Homes Novaliches Camarin Road Caloocan City S i r : This refers to your letter dated February 3, 2000 requesting for a ruling regarding the exemption from income tax of a senior citizen whose net income in a year, after deducting personal and additional exemptions, is P65,000.00. Specifically, your question is whether the senior citizen should be taxed on the entire income of P65,000.00 or only on the excess over the P60,000.00 allowed under the law. In reply, please be informed that Section 6.a. of Revenue Regulations No. 2-94 provides, viz: a. A Senior citizen whose annual taxable income exceeds the poverty level of P60,000 or such amount as may thereafter be determined by the NEDA for a certain taxable year shall be liable to the individual income tax in the full amount thereof on his taxable income net of allowable deductions. Accordingly, the tax due from the senior citizen adverted to in your query shall be computed based on the entire amount of P65,000.00 after deducting personal and additional exemptions. Very truly yours, Commissioner of Internal Revenue By: (SGD.) EDMUNDO P. GUEVARA Deputy Commissioner (Legal and Inspection Group)