FABM2

QUARTER 2 MODULE
4
LESSON 1 TAXABLE
INCOME AND
TAX DUE
GROUP 5
GABRIEL SARITA
YVON AGUAS
HRISTINE APOSTOL
What is the Taxable Income and Tax
Due?
 TAXABLE INCOME -is the amount of
income subject to tax, after
deductions and exemptions.
 TAX DUE-The amount of tax liability
as determined by the Department of
Taxation or the State Corporation
Commission.
1.Who is the regulatory body who handles the
collection of government taxes?
Bureau of Internal Revenue (BIR) is an attached
agency of the Department of Finance. Its task is to
assess and collect all national internal revenue taxes,
fees, and charges, and to enforce all forfeitures,
penalties, and fines connected with it.
2. Who can gain income and be taxed?

Individuals and corporations are the major
classifications of taxpayers. The basis for the
computation of the tax due is the determination of
gross income. This lesson covers tax due to
individuals.
3.What part of the income is being
taxed?
Taxable income is the basis where tax
due is being computed.
Compensation Income
Add: Business Income
Total Gross Income
Less: Allowable
Deductions
4. How does each individual being taxed?
For individuals, each isTaxable Income
different in the recognition
of gross income.
Refer to the table below.
5. What do we use as a basis for
computation of taxes?
The new tax schedule as amended by RA 10963 or the Tax
Reform for Acceleration and Inclusion (TRAIN Law). This is
effective January 1, 2018 to December 31, 2022.
The tax rate depends on the taxable income of an individual.
Tax due is the amount paid by a taxpayer from its taxable
amount, rated using the tax table.
Tax due also called income tax payable.
Steps in Computing Income
Tax Due for Individuals
Step 1:Using the taxable income as reference, look
at the “over” column in
the tax table. The taxable income must be greater
than the over column but less than the “but not
over” column.
Step 2:Refer to the tax rate corresponding to the
row of the taxable income.
Compute for the excess; Excess (Taxable income
“Over” column) x tax rate (%)
Step 3:Add the tax equivalent (if present)

1.Resident citizen considers all income from
worldwide sources and its corresponding allowable
deductions and expenses.
2.Non-resident citizen considers income from sources
within the Philippines and its corresponding allowable
deductions and expenses.
3.Resident alien considers income from sources within the
Philippines and its corresponding allowable deductions and expenses.
4. Non-resident alien engaged in trade or business considers income

from sources within the Philippines and its corresponding allowable deductions
and expenses.
5. Non-resident alien not engaged in trade or
business considers income from sources within the
Philippines and imposed of 25% Final tax at gross income.
Example: Taxable income for a resident citizen: P500,000
Step 1:Using the taxable income as reference, look at the “over” column
in the tax table. The taxable income must be greater than the over column
but less than the “but not over” column.
Row: over-400,000/ not over 800,000 Refer to

the tax rate corresponding to the row of the
taxable income. Tax rate: P30,000+ 25% of
excess over
Step 2: Compute for the excess: (Taxable income

“Over” column) x tax rate (%)
( P 500,000-400,000)*25\% P 100000 * 25 \
%=P25,000
Step 3: Add the tax equivalent (if present)
P30,000+ 25,000 P55,000 (Tax Due)
The Bureau of Internal
Revenue (BIR)
It is an attached agency of the
Department of Finance. Its task is
to assess and collect all national
internal revenue taxes, fees, and
charges, and to enforce all
forfeitures, penalties, and fines
connected therewith,
The current Commissioner of BIR is

Caesar Dulay under Duterte
administration.
Primary Registration
A. Securing a Taxpayer Identification
Number
Taxpayer(TIN)
identification number (TIN) is a unique number
assigned to each taxpayer whether individual or juridical
person. Once a person has TIN, it will be his lifetime number for
BIR, thus he cannot have several numbers. This is intended to
monitor the payment of the taxpayer to their obligation to the
government in the form of tax returns. You can apply for a TIN
by visiting the nearest branch or online at
https://ereg.bir.gov.ph.
Requirements to get a TIN:
a. Identification documents such as birth certificate, passport,
driver’s license, or cedula.
B. Marriage contract for married women.
C. Duly accomplished BIR Form 1901 (for self-employed/starting
a business), or BIR 1902 (for employee) or BIR 1904 for
unemployed with transactions in the government, whichever is
applicable.
B. Registration of Business in BIR
Registering a business to BIR is one of the things
that make the business legal and will avoid the risks
of being. Tax evader. BIR form 2303 or the
Certificate of Registration (COR) is proof that the
business is registered. The requirements differ in
many lines of business or type of industry. These
are some basic requirements for a single proprietor.
Requirements to get BIR 2303 (Certificate of
Registration)
1.DTI certification.
2. Mayor's permit
3. TIN
4. BIR Form 1901 (Self-
employed)
5. BIR Form 0605 (Payment
BIR Forms

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QUARTER 2 MODULE

2. Who can gain income and be taxed?

Step 3:Add the tax equivalent (if present)

4. Non-resident alien engaged in trade or business considers income

Row: over-400,000/ not over 800,000 Refer to

Step 2: Compute for the excess: (Taxable income

The current Commissioner of BIR is

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