Denial of Request for Tax Exemption of Bank Deposit Interest

February 6, 1998 BIR RULING NO. 015-98 21 (e)-000-00-015-98 Mr. Rafael L. Dondoyano C/o Mayor's Office Zamboanga City S i r : This refers to your letters dated January 7, 1992 and August 23, 1997 requesting exemption from the payment of the 20% income tax on interest from your bank deposit in the amount of P400,000.00. prLL It is represented that you are a retired government employee having served the government for 30 years; that you are now 72 years old and your wife is 68 years old; that you are both enjoying your retirement benefit as government retirees; that your above request is anchored on the certification issued by Mr. Tamanatao S. Amerol, Regional Director, Revenue Region No. 15, to the effect that you are exempt from filing your income tax return and paying income tax; and that you and your wife are now senior citizens and therefore, entitled to some benefits and special privileges under R.A. No. 7432. In reply, please be informed that one of the privileges and benefits of senior citizens under R.A. No. 7432, otherwise known as the Senior Citizen Act, is exemption from the payment of individual income taxes for those whose income is below P60,000.00 per annum. Such income tax exemption however, refers only to income derived from compensation below P60,000.00 per annum. Hence, interest income on bank deposit of senior citizens, as in this case, does not therefore, fall within the purview of the said exemption. Accordingly, your request for exemption from the payment of the 20% income tax on interest from your bank deposit of P400,000.00 is hereby denied for lack of legal basis. LLcd Very truly yours, (SGD.) LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue