Are Personal and Additional Exemptions Still Allowed on Your BIR Income Tax Return?

No — personal and additional exemptions no longer exist on any BIR income tax return covering income earned from January 1, 2018 onward. The TRAIN Law repealed NIRC Section 35, which used to let individual taxpayers deduct a ₱50,000 basic personal exemption plus ₱25,000 for each of up to four qualified dependents before computing income tax due. Older tax guides, spreadsheets, and even some outdated calculators still reference these amounts, which is where the confusion usually comes from.

What did NIRC Section 35 used to allow? #

Before 2018, NIRC Section 35 let every individual taxpayer — employee, self-employed, or professional — deduct a flat ₱50,000 basic personal exemption from gross income, plus an additional ₱25,000 for each qualified dependent child, capped at four dependents (₱100,000 maximum). A single parent with two qualified dependent children, for example, could deduct ₱50,000 + (2 × ₱25,000) = ₱100,000 total before arriving at taxable income, in addition to whatever business or professional deductions applied.

What happened to Section 35 under the TRAIN Law? #

The Tax Reform for Acceleration and Inclusion (TRAIN) Law, Republic Act No. 10963, repealed NIRC Section 35 outright, effective for taxable year 2018 onward, as part of a broader restructuring of individual income tax. RA No. 10963’s own title records this repeal directly:

“…CREATING NEW SECTIONS 51-A, 148-A, 150-A, 150-B, 237-A, 264-A, 264-B, AND 265-A; AND REPEALING SECTIONS 35, 62, AND 89; ALL UNDER REPUBLIC ACT NO. 8424, OTHERWISE KNOWN AS THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED…”

Section 62 (deduction for premium payments on health and hospitalization insurance, capped at ₱2,400 a year) was repealed in the same stroke, and Section 89 (a related estate tax provision) was repealed as well — all effective the same date the rest of TRAIN’s individual income tax changes took hold.

What replaced the exemption system? #

Rather than keep a fixed-peso exemption plus a per-dependent add-on, TRAIN restructured the graduated income tax brackets under NIRC Section 24(A) so that the first ₱250,000 of annual taxable income is taxed at 0% for every individual taxpayer, regardless of civil status or number of dependents. This built a much larger tax-free zone directly into the rate table itself:

A taxpayer who previously relied heavily on personal and dependent exemptions to reduce taxable income generally comes out ahead or roughly even under the wider ₱250,000 bracket — but the mechanism is completely different, and there’s no longer any dependent documentation to submit with the return for this purpose.

Where this still causes confusion #

Filers preparing BIR Form 1701A or choosing between the graduated rates and the 8% flat rate sometimes still look for a personal exemption line item that no longer exists on current forms, or use an outdated worksheet that deducts one anyway, understating actual tax due. Since 2018, taxable income for BIR Form 1700, 1701, and 1701A is computed directly — gross income (or gross sales/receipts, for self-employed filers electing the 8% rate) minus allowable business deductions or the optional standard deduction, with no separate personal or dependent exemption subtracted afterward.

Summary #

Personal and additional exemptions under old NIRC Section 35 were repealed by the TRAIN Law (RA No. 10963) starting taxable year 2018, along with the related health insurance premium deduction, and replaced with a much wider ₱250,000 zero-rate income bracket built into the graduated tax table itself. Any computation, template, or explanation that still shows a personal or dependent exemption line is using pre-2018 rules — see How to File BIR Form 1701A and 8% Income Tax Rate vs Graduated Rates for how individual taxable income is actually computed today.