BIR Ruling

November 18, 1977 Pensions and Similar Benefits Received by Retirees Exemption from Income Tax This refers to the claim filed on June 7, 1977 by MR. MARIANO M. MANGUBAT for refund of P2,544.00 as alleged erroneous payment of income tax for 1975 (p. 7). The records show that the taxpayer is a recipient of pensions administered by the United States Veterans Administration. It further shows that the taxpayer filed his income tax return for the said year declaring said pensions as income and paid the corresponding tax due thereon in the amount of P2,544.00 under Official Receipt No. 2549885 dated March 1, 1976 (p. 16). Actual remittance to the government of said payment was certified as correct by the Chief, Accounting Division (p. 26). Having learned that his pension is exempt from income tax, herein taxpayer filed this claim for refund. Section 1 of Presidential Decree No. 220 which took effect on June 20, 1973, provides as follows: "The provisions of any existing law notwithstanding, social security benefits, retirement gratuities, pensions and other similar benefits received by retiring employees and workers, wither received from Philippine or foreign government agencies and other institutions, private or public, shall be exempt from the payment of income tax." Based on the foregoing, it is clear that the taxpayer has made an erroneous payment of his income tax when he declared his pension as income for the year in question. According to the Asst. Chief, Receivable Accounts Division, the taxpayer has no record of any outstanding tax liability with the Bureau (p. 13). In view thereof and since the claim was filed within two (2) years from the date the tax was paid, it is respectfully recommended that the amount of P2,544.00 be refunded to Mr. Mariano M. Mangubat, Lapulapu City, pursuant to Section 309 of the Tax Code. cdti