BIR Ruling No. 108-65

September 23, 1965 BIR RULING NO. 108-65 Mr. Pedro J. Sarmiento 774 P. Esteban St., Caridad, Cavite City S i r : Reference is made to your letter stating the following: "a. Single b. Gross annual income (Salary) . . . P6,600.00 c Chief support of a sister, single, 47 years old, physically incapacitated (heart ailment), no source of income, living with the taxpayer in the same house. Estimated annual amount of support, including medicines and doctor's fee for recurring treatments, provided annually P1,200.00 d. Estimated annual amount given for the support of a nephew, 15 years old, parents living, not residing in the same house with the taxpayer P800.00 e. Amount paid yearly to a house maid P420.00 f. The taxpayer owns the house, wherein he, his sister and the house maid live, and exercises the right of family control. "1. Can the taxpayer be considered as head of the family and claim exemption of P3,000.00? "2. If so, what requirements must be complied. If not, can the taxpayer claim the amounts in item c P1,200.00, item d P800.00 and item e P420.00, total of P2,420.00, as itemized deductions in case the standard deduction of 10% is not elected? "3. If the taxpayer can claim as head of the family and does not elect the standard deduction of 10%, can the amounts in item d P800.00 and item e P420.00, total of P1,220.00, be claimed as deductions?" In reply thereto, I have the honor to inform you as follows: Under Section 23(b) of the National Internal Revenue Code, the following persons are entitled to P3,000 exemptions; (a) a married man; (b) a married woman; and (c) an unmarried man or woman with one or both parents, or one or more brothers or sisters, or one or more legitimate, recognized natural, or adopted children living with and dependent upon him or her for their chief support where such brothers, sisters, or children are not more than 23 years of age, unmarried, and not gainfully employed, or where such children are incapable of self-support because mentally or physically defective. Such being the case, you are not entitled to the personal exemption of P3,000.00 as head of a family because as stated in your letter, your dependent sister is already more than 23 years of age and therefore, she can no longer qualify as dependent under Section 23(b) of the Tax Code. Neither can you claim personal exemption as head of a family merely because you support dependent nephews or nieces, unless they are legally adopted as required by Section 23(b) of the Tax Code. As regards your query on the deductibility of the amounts spent for their support as expenses, suffice it to say that Section 30 of the Tax Code provides that in computing net income, there shall be allowed as deductions all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business . Accordingly, the amounts expended for the support of a sister over 23 years of age, the estimated annual amount expended for the support of a nephew, and the cost of hiring domestic help, are not deductible from your gross income because they constitute personal expenses pursuant to Section 31(a)(1) of the Tax Code. lexlib Very truly yours, (SGD.) MISAEL P. VERA Acting Commissioner of Internal Revenue