BIR Ruling No. 023-61

January 27, 1961 BIR RULING NO. 023-61 Mr. Francisco S. Eleazar Rm. 506 Maria Dolores Bldg. 1679 Azcarraga, Manila S i r : In answer to your letter dated January 26, 1961 regarding deductions from your income, please be informed as follows: Expenses incurred for light and water services in the dwelling or residential houses are not deductible from gross income; but those incurred for said services in the establishment where the business of the taxpayer is conducted are deductible. The same is true with rents. Subject to the limitations and exceptions provided in Section 30 of the Tax Code, taxes paid or accrued (depending on whether the taxpayer's method of accounting is on cash or accrual basis) within the taxable year are deductible from gross income. Licenses paid to the Government of the Philippines or any of its political subdivisions during the taxable year for the privilege of engaging in business are deductible from gross income. Purchases are not deductible from gross income because they are already subtracted from the total sales in arriving at the gross income. Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue