Whether the Monthly Retirement Pension in the Amount of P8,377.75 is Exempt from Income Tax

October 5, 1995 BIR RULING NO. 150-95 28 (b) (7) (F) 000-00 150-95 Ret. Col. Alfredo L. Sarmiento No. 1 St. Mary Street, Paradise Village Quezon City S i r : This refers to your letter dated July 31, 1995 requesting confirmation of your opinion that your monthly retirement pension in the amount of P8,377.75 is exempt from income tax. It appears that pursuant to Presidential Decree No. 1638, as amended, upon attainment of age sixty (60) with at least fifteen (15) years of active service, or upon accumulation of thirty (30) years of satisfactory active service, whichever is earlier, a military person shall be compulsorily retired unless his continued service is, in the opinion of the President, required for the good of the service; that military personnel covered under the provisions of Title III shall be retired in the grade next higher than the permanent grade last held except officers in the permanent grade of Colonel/Captain (PN) or higher; and that the benefits authorized under P.D. 1638, except as provided therein, shall not be subject to attachment, garnishment, levy, execution or any tax whatsoever. In reply, please be informed that pursuant to Section 28(b)(7)(F) of the Tax Code, as amended, benefits received from the GSIS and the retirement gratuity received by government officials and employees are excluded from the gross income and, therefore, exempt from taxation. Accordingly, your monthly pension benefits in the amount of P8,377.75 are not subject to income tax and consequently to the withholding tax on wages. aisadc Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue