BIR Ruling

September 5, 1973 Atty. Salvador H. Laurel 12th Floor, Philippine Banking Corporation Bldg. Anda Circle, Port Area, Manila S i r : This refers to your letter dated August 30, 1973 requesting a ruling on the extent of the exemption from capital gains tax under Presidential Decree Nos. 16-A covering a sale of a piece of land to be consummated under either of the following alternative conditions: cdtech "a) The deed of sale will be executed before October 4, 1973 and title to the property will thereupon pass on to the buyer, but the purchase price payable in periodic installments some of which will become due and demandable after said date; "b) The deed of sale will be executed before October 4, 1973 with the purchase price payable in periodic installments some of which will become due and demandable after said date, and the title to the property will pass on the buyer after full payment of such purchase price. In reply, I have the honor to inform you that for purposes of Presidential Decree No. 16 as amended by Presidential Decree No. 16-A which is effective until October 5, 1973, the gains from the sale of capital assets on the installment basis are deemed realized upon receipt of each installment payment. Accordingly, under either of the foregoing alternatives, the gains corresponding to the installments to be received after the effectivity of the Decree shall not exempt from the capital gains tax even if invested in accordance with the Decree. Only the gains corresponding to the installments received during the effectivity of the Decree are exempt from tax if invested within six (6) months from the time they are received. acd Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue TAN-1601-593-5 "TAXPAYERS SHOULD INDICATE THEIR TAN IN ALL COMMUNICATIONS TO THE BIR."