Protest Against Deficiency Income Tax Assessment on Ground that Taxpayers are Entitled to an Additional Exemption of P5,000 for Having their Mother, a Senior Citizen, as Dependent

July 24, 1995 BIR RULING NO. 113-95 29 (1) 000-00 113-95 (1) & (2) Lopez Rasul Maliwanag Baybay & Associates Suites 316 & 318 Downtown Ctr. Bldg. 316 Q. Paredes St. Binondo, Manila Attention: Atty . Agripino C . Baybay III Gentlemen : This refers to your letter dated January 10, 1995 protesting, in behalf of the Spouses Agripino, Sr. and Carmen Baybay of Maasin, Southern Leyte, against the deficiency income tax assessment of P1,158.53 on the ground that your said clients are entitled to an additional exemption of P5,000 for having their mother, a senior citizen, as a dependent. It appears that in their 1993 income tax return, your said clients claimed an additional exemption of P5,000.00 for their dependent mother, Mrs. Maria H. Abilong, a senior citizen, but said claim was denied by the Revenue District Officer of Maasin, Southern Leyte in her letter dated July 16, 1993; that subject taxpayers filed their protest against the said denial on August 1, 1993; that just recently, your clients received another letter/assessment from Ms. Fe. B. Reyes, RDO, Revenue District No. 90, Maasin, Southern Leyte requiring Mr. Baybay, Sr. to pay a deficiency tax of P1,158.53 and at the same time denying your clients' claim of P5,000.00 for the aforesaid dependent-senior citizen; and that it is your opinion that your said clients are entitled to the P5,000.00 additional exemption for their senior citizen-mother pursuant to Art. 10, Rule VI, Rules and Regulations implementing R.A. 7432, viz: "Article 10. Personal Tax Exemption for Benefactor . A senior citizen shall be treated as dependent provided for in the NIRC and as such, shall be accorded by privileges granted by the Code insofar as having dependents are concerned. In determining personal exemptions allowable to individuals under Section 29 (k) (1) of the NIRC, a senior citizen may be treated as dependent . . . . "The personal exemption shall take effect January 1992." (Emphasis supplied.) In reply, please be informed that contrary to your opinion, the last paragraph of Section 7 of Revenue Regulations No. 2-94, the implementing regulations of R.A. No. 7432, otherwise known as the "Senior Citizens Act", reads: "Sec. 7. Basic Personal Exemption only for Benefactor . A qualified senior citizen living with and taken cared of by a benefactor whether related to him or not, shall be treated as a dependent and his benefactor shall be entitled to the basic personal exemption of P12,000 as head of the family, as defined in Section 2(e) of these Regulations. xxx xxx xxx "Caring for a dependent senior citizen shall not entitled the benefactor to claim the additional exemption allowable to a married individual or head of family with qualified dependent children under Sec. 29(1)(2) of the NIRC, as amended." In this connection, pertinent portions of Section 29(1) (1) and (2) of the Tax Code, as amended, reads: "(1) Personal exemptions allowable to individuals. "(1) Basic personal exemption . For the purpose of determining the tax provided in Section 21(a) of this Title, there shall be allowed a basic personal exemption as follows: For single individual or married individual juridically decreed as legally separated with no qualified dependants P9,000 For head of a family P12,000 For each married individual P18,000 xxx xxx xxx "(2) Additional exemption. (A) Taxpayers with dependents . A married individual or a head of family shall be allowable an additional exemption of Five Thousand Pesos (P5,000.00) for each dependent: . . . For purposes of this paragraph, a dependent means a legitimate, recognized natural or legally adopted child chiefly dependent upon and living with the taxpayer if such dependent is not more than twenty-one (21) years of age, unmarried and not gainfully employed or if such dependent, regardless of age, is incapable of self-support because of mental or physical defect." prcd xxx xxx xxx In view of all the foregoing, this Office hereby confirms the opinion of the RDO of Maasin, Southern Leyte disallowing the amount of P5,000 claimed by your clients as additional exemption for the aforesaid dependent-senior citizen. cdtech Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue