BIR Ruling [DA-148-96]

April 17, 1996 BIR RULING [DA-148-96] Dr. Dionisio Gat. Ducusin President, Nueva Vizcaya State Institute of Technology (NVSIT) Bayombong, Nueva Vizcaya S i r : This refers to your letter dated February 15, 1995 addressed to the Revenue District Officer, Revenue District Office No. 14, Bayombong, Nueva Vizcaya, which was referred to this Office, relative to the P500.00 additional compensation per month received by officials and employees of the NVSIT having Salary Grade 1 up to Salary Grade 25, pursuant to Administrative Order No. 53 of the President of the Philippines. It is your contention that since the P500.00 additional compensation has not yet been formally integrated into the basic pay of the officials and employees of the NVSIT, it does not form part of the gross income subject to income tax. In reply, please be informed that while this Office had previously ruled under BIR Ruling No. 06-95 dated January 16, 1995 that the P500.00 additional compensation received monthly by government officials and employees having Salary Grade 1 up to Salary Grade 25 shall not be subject to the withholding tax pending its formal integration into the basic pay of the subject government personnel, said additional compensation shall still be includible in the taxable gross compensation income of the employees. ADEacC In other words, said ruling does not negate the fact that the P500.00 additional compensation is considered as income, hence, includible as part of gross income under Section 28 of the Tax Code, as amended, which provides that "gross income means all income from whatever source derived . . ." and consequently, subject to income tax. In fine, this ruling confirms the opinion of our Revenue District Officer, Revenue District No. 14, Bayombong, Nueva Vizcaya. Enclosed is a copy of BIR Ruling No. 06-95 for your perusal. Very truly yours, (SGD.) ALICIA P. CLEMENO Assistant Commissioner (Legal Service)