Amendments to Personal Exemptions Under the National Internal Revenue Code
- Modifies subparagraphs (a), (b), and (c) of Section 23 to increase and specify exemptions.
Personal Exemption for Single Individuals
- Basic personal exemption set at P3,000 for single persons or legally separated individuals.
- Special additional exemption of P4,000 granted if gross compensation income does not exceed P20,000.
Personal Exemption for Married Persons or Heads of Family
- Basic personal exemption for married persons: P6,000.
- For heads of family (unmarried persons supporting dependents): P4,500.
- Only one basic exemption of P6,000 may be claimed by both husband and wife if not legally separated.
- Special additional exemption of P4,000 allowed if gross compensation income is at most P20,000.
- "Head of family" defined as an unmarried person supporting parents, siblings, or children who are dependent, not gainfully employed, or incapable of self-support due to mental or physical defects.
Additional Exemption for Dependents
- P2,000 allowance for each legitimate, recognized natural, or adopted child who is dependent, living with the taxpayer, under 21 years old, unmarried, and not gainfully employed or incapable of self-support.
- Applicable only if the taxpayer is married or a head of family.
- Maximum of four dependents can be claimed for additional exemptions.
- Additional exemption of P1,000 for children qualified as dependents prior to January 1, 1980.
Application of Exemptions for Multiple Income Sources
- Personal and additional exemptions first deducted from gross compensation income.
- Any excess is then deducted from other income.
Effectivity and Coverage
- The decree is effective immediately upon approval.
- Applies to compensation income earned in the calendar year 1983.