Interpretation of the Special Additional Exemption of P4,000

April 21, 1987 BIR RULING NO. 108-87 30 (2) 000-00 108-87 S i r : This refers to your letter dated March 23, 1987, requesting enlightenment on the correct interpretation of the special additional exemption of P4,000 prescribed in Section 30(2)(B) of the Tax Code, as amended by Executive Order No. 37, reading as follows: "(B) Taxpayers with gross compensation income not exceeding P20,000 . A special additional exemption of Four thousand pesos (P4,000) shall be allowed if the gross income of a single, married or legally separated individual, or head of family does not exceed the aggregate amount of P20,000: Provided, that in case married individuals elect to compute their income tax separately, the spouse claiming the additional exemption for dependent children shall be entitled to the special additional exemption of P4,000.00." asiacd In reply, you are informed as follows: 1. The special additional exemption of P4,000 is allowed if the aggregate gross compensation income of both husband and wife does not exceed P20,000, (BIR Ruling No. 86-87). 2. The basis of the special additional exemption is the aggregate gross compensation income of both husband and wife excluding gross income from business and gross income from the exercise of profession even if such gross income does not exceed P20,000; 3. The special additional exemption cannot be deducted from the net income from business of one of the spouses. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner