Implementing Rules and Regulations of Republic Act No. 11057 (Personal Property Security Act)

May 21, 1973 Mr. M. E. Enicola Araneta St., San Carlos City Negros Occidental S i r : In reply to your letter dated February 7, 1973 I have the honor to inform you that pursuant to Section 12 of Presidential Decree No. 69, the proviso of Section 23(c) of the Tax Code as amended by the said Decree that the total number of dependents for which additional exemptions may be claimed shall not exceed four (4) dependents shall take effect and apply to income beginning January 1, 1973. Such being the case, an individual taxpayer can still claim in his 1972 income tax return additional exemption for all of his dependents children in 1971 provided that he qualifies as "head of family" under Section 23(b) of the same Code; and, that such dependents are his legitimate, recognized natural, adopted or stepchildren, wholly dependent upon and living with the taxpayer, not more than twenty-three (23) years of age, unmarried, and not gainfully employed or incapable of self-support because mentally or physically defective. (B.I.R. Ruling No. 73-006 dated March 30, 1973). cdtech However, since the said proviso of Section 23(c) of the Tax Code as amended by Presidential Decree No. 69 is of prospective application, those who have more than four (4) qualified dependents in 1972 may continue to claim the additional exemption for the total number of such dependents for the calendar year beginning January 1, 1973, and subsequent years provided that of the end of said calendar years such dependents meet the requirements enumerated in Section 23(c) of the Tax Code as amended by Presidential Decree No. 69 which for your reference and guidance, is quoted hereunder as follows: "Section 23(c). Additional Exemption for dependents . The sum of one thousand pesos for each legitimate, recognized natural, or adopted child wholly dependent upon and living with the taxpayer if such dependents are not more than twenty-one years of age, unmarried, and not gainfully employed or incapable of self-support because mentally or physically defective. The additional exemption under this subsection shall be allowed only if the person making the return is the head of the family. Provided, however, That the total number of dependents for which additional exemptions may be claimed shall not exceed four dependents." (BIR Ruling No. 73-013 dated April 16, 1973). Very truly yours, (SGD.) CONRADO P. DIAZ Acting Commissioner of Internal Revenue