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RA 9504 Sec 4a.k.a Section 35(A) and (B) of Republic Act No. 8424

SEC. 35: Allowance of Personal Exemption forIndividual Taxpayer

A. In General

For purposes of determining the tax provided in Section24(A) of this title, there shall be allowed a basicpersonal exemption amounting to Fifty thousandpesos (P50,000) for each individual taxpayer.

In the case of married individual where only one of thespouses is deriving gross income , only such spouseshall be allowed the personal exemption.

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RA 9504 Sec 4a.k.a Section 35(A) and (B) of Republic Act No. 8424

SEC. 35: Allowance of Personal Exemption forIndividual Taxpayer

B. Additional Exemption for Dependents

There shall be allowed an additional exemption oftwenty-five thousand pesos (25,000) for eachdependent not exceeding four (4)

In the case of married individual where only one of thespouses is deriving gross income , only such spouseshall be allowed the personal exemption.

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RA 9504 Sec 4a.k.a Section 35(A) and (B) of Republic Act No. 8424

In the case of legally separated spouses, additionalexemptions may be claimed only by the spouse who hascustody of the child or children

the total amount of additional exemptions that may beclaimed by both shall not exceed the maximum additionalexemptions herein allowed

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RA 8424 Tax Reform Act of 1997

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RA 8424 Sec 35 Allowance of Personal Exemption for Individual Taxpayer

Subsection C: CHANGE OF STATUSIf the taxpayer marries or should have additionaldependent(s) as defined above during the taxable year, thetaxpayer may claim the corresponding additionalexemption, as the case may be, in full for such year.

If the taxpayer dies during the taxable year, his estate may

still claim the personal and additional exemptions forhimself and his dependent(s) as if he died at the close ofsuch year.

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RA 8424 Sec 35Subsection C

If the spouse or any of the dependents dies or if any of suchdependents marries, becomes twenty-one (21) years old or

becomes gainfully employed during the taxable year, the

taxpayer may still claim the same exemptionsas if the spouse or any of the dependents died, or as if suchdependents married, became twenty-one (21) years old orbecame gainfully employed at the close of such year.

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RA 8424 Sec 35 Allowance of Personal Exemption for Individual Taxpayer

Subsection D: Personal Exemption Allowable toNonresident Alien Individual

A nonresident alien individual engaged in trade,

business or in the exercise of a profession in thePhilippines shall be entitled to a personal exemption in theamount equal to the exemptions allowed in the income taxlaw in the country of which he is a subject - or citizen, tocitizens of the Philippines not residing in such country, not to

exceed the amount fixed in this Section as exemption forcitizens or resident of the PhilippinesShould file a true and accurate return of the total incomereceived by him from all sources in the Philippines, asrequired by this Title

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RA 8424 Sec 35Subsection D

In the case of married individuals where only oneof the spouses is deriving gross income ,only such spouse shall be allowed the personalexemption.

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RA 8424 Sec 36

ITEMS NOT DEDUCTIBLE A. General Rule:

Personal, living or family expensesAny amount paid out for new buildings or for permanentimprovements, or betterments made to increase the valueof any property or estate

* This Subsection shall not apply to intangible drilling anddevelopment costs incurred in petroleum operations whichare deductible under Subsection (G) (1) of Section 34 of thisCode.

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SEC 36ITEMS NOT DEDUCTIBLE

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What is a net income ? Gross income minus taxes, allowances and

deductions

DEDUCTION expense subtracted from grossincome in order to reduce the amount ofincome subject to tax

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RA 8424 Sec 36

ITEMS NOT DEDUCTIBLE Any amount expended in restoring property or in makinggood the exhaustion thereof for which an allowance is orhas been made

Premiums paid on any life insurance policy covering thelife of any officer or employee, or of any person financiallyinterested in any trade or business carried on by the

taxpayer, individual or corporate, when the taxpayer isdirectly or indirectly a beneficiary under such policy

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RA 8424 Sec 36

B. Losses from Sales or Exchanges of PropertyBetween members of a family.

the family of an individual shall include only his

brothers and sisters (whether by the whole or half-blood), spouse, ancestors, and lineal descendants

Except in the case of distributions in liquidation,between an individual and corporation more thanfifty percent (50%) in value of the outstandingstock of which is owned, directly or indirectly, byor for such individual

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Between the grantor and a fiduciary of anytrustBetween the fiduciary of and the fiduciary of atrust and the fiduciary of another trust if thesame person is a grantor with respect to eachtrustBetween a fiduciary of a trust and beneficiaryof such trust

RA 8424 Sec 36

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Grantor transfers a property Trust a legal arrangement in which an individual

(the trustor) gives fiduciary control of property toa person or institution (the trustee) for the benefitof beneficiaries.

Fiduciary - anindividual, corporation or association holding assets foranother party

Beneficiary - An individual, institution, trustee,

or estate which receives, or may become eligible toreceive, benefits under a will, insurance policy, retirementplan, annuity, trust, or other contract.

RA 8424 Sec 36

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REFERENCE

http://www.lawphil.net/statutes/repacts/ra2008/ra_9504_2008.html

http://www.lawphil.net/statutes/repacts/ra1997/ra_

8424_1997.html