BIR Ruling [DA-310-97]

September 5, 1997 BIR RULING [DA-310-97] Misses Remedios Q. Ocampo and Rosita M. Isip ESC Quezon City, District I Quezon City Mesdames : This refers to your letter dated June 4, 1997 requesting, in effect for a confirmation of your opinion that the compensation income you received are exempt from income tax and consequently from withholding tax pursuant to the provisions of Republic Act No. 7432, otherwise known as the Senior Citizens Act. It is represented that both of you are employees of the Metropolitan Manila Development Authority (MMDA) with ages 65 and 63, respectively; that for the year 1996, your gross compensation income was P59,078.00 each; and that MMDA has been deducting withholding taxes from your salaries for the current year. In reply, please be informed that under R.A. No. 7432, which was approved on April 23, 1992, senior citizens shall be entitled to exemption from the payment of individual income tax provided that their annual taxable incomes do not exceed the poverty level of P60,000.00 or such amount as may be determined by the National Economic and Development Authority (NEDA) for a certain taxable year. For purposes of said Act, the term "senior citizens" shall mean any resident citizen of the Philippines at least sixty (60) years old, including those who have retired from both government offices and private enterprises, and has an income of not more than Sixty Thousand Pesos (P60,000.00) per annum subject to review by the National Economic and Development Authority (NEDA) every three years. (Sec. 2, R.A. No. 7432) In view thereof, and considering that you are both qualified as senior citizens, this Office is of the opinion as it hereby holds that you are both exempt from the payment of income tax and consequently from withholding tax. (BIR Ruling No. 066-94 dated March 2, 1994) AcTHCE 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.) SIXTO S. ESQUIVIAS IV OIC, Assistant Commissioner (Legal Service)