Amounts Received as Retirement Gratuity from GSIS Exempt from All Taxes

August 26, 1985 BIR RULING NO. 140-85 29 (c) (7) (F) 1076-84 140-85 M a d a m : This refers to your letter dated July 9, 1985 requesting a ruling as to whether the proceeds of your retirement gratuity from the Government Service Insurance System (GSIS) is a taxable income subject to withholding by your last employer, the Philippine Veterans Bank. Documentary evidence submitted shows that you retired from the Philippine Veterans Bank as Branch Manager; that you have complied with all requirements for retirement under Section 12(C) of Commonwealth Act No. 186 otherwise known as "An Act to create and establish a "Government Service Insurance System" as amended by Republic Act No. 1616 and Republic Act No. 4968; and that your retirement was approved by the GSIS effective March 4, 1985. In reply, please be informed that Section 29(c)(7)(F) of the Tax Code as amended, provides that benefits received from the GSIS and the retirement gratuity received by government officials and employees are exempt from income tax. In view thereof, this Office is of the opinion as it hereby holds that any and all amounts you received as retirement gratuity from the GSIS paid through your last employer, the Philippine Veterans Bank as a result of your retirement from the service of said bank are exempt from all taxes and consequently, from the withholding tax prescribed by Section 91, Chapter XI, Title II of the Tax Code, as amended by Batas Pambansa Blg. 135 and implemented by Revenue Regulations No. 6-82. It is however, understood that this tax exemption does not include payments for your salary and cash equivalent of your accumulated vacation and sick leaves, if any. aisadc Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner