BIR Ruling No. 082-63

November 5, 1963 BIR RULING NO. 082-63 Mr. Rodolfo V. Martel Greatwall Advertising 136 Yakal Street Makati, Rizal S i r : In reply to your letter dated June 14, 1963, I have the honor to quote hereunder the pertinent provisions of Republic Act No. 1000 which reads as follows: prcd "Section 1. . . . xxx xxx xxx "The bonds to be issued under this Act shall be exempt from taxation, including the tax on foreign exchange, by the Government of the Republic of the Philippines or by any political or municipal subdivision thereof, which fact shall be stated on their face in accordance with this Act, under which the said bonds are issued; and shall likewise be exempt from attachment, execution or seizure." Pursuant to the above-quoted provision, it is apparent that the bonds issued under the Act are exempt from all kinds of taxes. However, upon the death of the bondholder, the said bonds shall form part of the gross estate of the decedent. (Sec. 38, Tax Code) The interest income from the bonds which may exist at the time of the death of the decedent, although exempt from income tax is includible in the gross estate of the decedent, since the tax is not upon the bonds, but upon the right of transfer by will or under the intestate law, (Murdock v. Ward 178, U.S. 139) With respect to your query as to the redeemable value of the bonds in the event of an extraordinary inflation or deflation, it is suggested that the same is directed to the Central Bank of the Philippines who has jurisdiction on the matter. Very truly yours, (SGD.) RAMON T. OBEN Acting Commissioner of Internal Revenue