Personal Exemptions- are arbitrary amounts allowed as deductions from gross income of the individual taxpayer from compensation, business (self-employment) or practice of profession. Personal exemptions in a sense represent the personal, living or family expenses of the taxpayer.
Kinds of personal exemptions
Basic personal exemption- this exemption is allowed on account of the civil status of the taxpayer;
The new law increases the personal exemption of individuals to P50,000.00. It removes the personal exemptions amounting to P20,000.00, P25,000.00 and P32,000.00 for single, head of family and married individuals, respectively. Moreover, the definition of a “head of family” has been deleted in Section 35.
Additional exemptions- this exemption is further allowed to the taxpayer by reason of his qualified dependent children.
The new law increases the additional exemption from P8,000.00 for each dependent to P25,000.00 for each dependent, not exceeding four (4).
A ‘dependent’ means a legitimate, illegitimate 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.
The additional exemption for dependent shall be claimed by only one of the spouses in the case of married individuals. And in the case of legally separated spouses, additional exemptions may be claimed only by the spouse who has custody of the child or children. Provided that the total of additional exemption that may be claimed by both shall not exceed the maximum additional exemptions allowed.
Kinds of personal exemptions
Basic personal exemption- this exemption is allowed on account of the civil status of the taxpayer;
The new law increases the personal exemption of individuals to P50,000.00. It removes the personal exemptions amounting to P20,000.00, P25,000.00 and P32,000.00 for single, head of family and married individuals, respectively. Moreover, the definition of a “head of family” has been deleted in Section 35.
Additional exemptions- this exemption is further allowed to the taxpayer by reason of his qualified dependent children.
The new law increases the additional exemption from P8,000.00 for each dependent to P25,000.00 for each dependent, not exceeding four (4).
A ‘dependent’ means a legitimate, illegitimate 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.
The additional exemption for dependent shall be claimed by only one of the spouses in the case of married individuals. And in the case of legally separated spouses, additional exemptions may be claimed only by the spouse who has custody of the child or children. Provided that the total of additional exemption that may be claimed by both shall not exceed the maximum additional exemptions allowed.
No comments:
Post a Comment