Whether a Disability Pension is Taxable and Who may be Subject to Residence Tax

November 15, 1966 BIR RULING NO. 059-66 Mr. Ireneo T. Banzuela Balintawak Street Legaspi City S i r : This refers to your letter dated May 20, 1966 requesting information as to whether or not a disability pension is taxable, and as to whether you are subject to the residence tax. In reply thereto, I have the honor to inform you that disability pension is not subject to income tax pursuant to Section 29(b)(5) of the Tax Code. Commonwealth Act No. 465 provides as follows: "Every person who has been regularly employed for at least 30 working days, is engaged in business or occupation, or owning property with an aggregate value of P1,000.00 or more, or required by law to file an income tax return, is liable to the payment of the residence tax." Accordingly, if your income consists only of your disability pension and you do not own real property, you are not subject to the residence tax. However, Section 3 of Commonwealth Act No. 465 provides that a residence certificate may be issued to any person or corporation not liable to the payment of the residence tax upon payment of twenty centavos. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue