How Individual's Whose Compensation Income Exceeds P60,000.00 Shall File His Income Tax Return

September 29, 1997 BIR RULING NO. 105-97 44 (a) (2) (c) 000-00 105-97 Ms. Norma C. de la Osa Carmen East, Rosales 2441 Pangasinan M a d a m : This refers to your letter dated March 5, 1997 in effect requesting for clarification on how an individual whose compensation income exceeds P60,000.00 shall file his Income Tax Return (ITR). casia It appears that for taxable year 1994, you earned a total compensation income of P70,824; that upon pre-audit, it was found out that the total amount due and collectible from you is P3,750.82; that it is your understanding that you need not file an income tax return and need not pay the income tax due thereon because as per your computation, your taxable compensation income for the subject taxable year is only P1,824.00 and that you are entitled to a P60,000 exemption. In reply, please be informed that Section 44(a)(2)(c) of the Tax Code, as amended, provides among others, as follows: "Sec. 44(a)(2)(c) The following individuals shall not be required to file an income tax return: xxx xxx xxx " Individuals with respect to pure compensation income, as defined in Section 28(a)(1), derived from sources within the Philippines, the income tax on which has been withheld under the provisions of Section 72 of this Code : Provided, that an individual deriving compensation concurrently from two or more employers at any time during the taxable year shall file an income tax return: Provided, further, that an individual whose pure compensation income exceeds Sixty Thousand Pesos (P60,000) shall also file an income tax return ." (Emphasis supplied.) which means that individuals with only one employer whose pure compensation income per annum does not exceed P60,000.00 and which income had already been subjected to withholding tax need not file an income tax return. This is because it is incumbent upon the employer to remit to this Bureau the tax withheld on compensation income, as the employer is constituted as the withholding agent of the BIR with regard to the taxes withheld from the taxpayer's monthly salary. However, if the employer did not withhold the corresponding income tax from the compensation income of his employees, as in this case, it is incumbent upon the employee, regardless of the amount of his annual income, to file his income tax return (ITR) and pay the corresponding tax due thereon since no tax has been withheld by his employer. LLphil For your proper guidance, we are attaching a copy of our Instruction Booklet to guide you in accomplishing your annual income tax return. Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue