BIR Ruling No. 348-61

August 8, 1961 BIR RULING NO. 348-61 Dy Te & Company P. O. Box 85 Cebu City Gentlemen : This is with reference to your letter dated July 15, 1961, requesting information as to the taxability for inheritance tax of Social Security System death benefit and as to whether or not the capital investment of the surviving spouse (wife) in certain companies or partnerships is considered as conjugal property. In reply thereto, I have the honor to inform you as follows: 1. Death benefits received from the Social Security System are exempt from estate and inheritance taxes in accordance with Section 17 of Republic Act No. 1161, otherwise known as the Social Security Act which provides: "SEC. 17. Exemption from tax , legal process and lien . All papers or documents which may be required in connection with the operation or execution of this Act, all the contributions collected and payments of benefits made thereunder, and all accruals thereto shall be exempt from any tax , assessment , fee or charge , and such payments shall not be liable to attachment, garnishment, levy or seizure by or under any legal or equitable process whatsoever, either before or after receipt by the person or persons entitled thereto, except to pay any debt of the covered employee to the system." (Emphasis supplied). 2. The capital investment of the surviving spouse (wife) to certain companies or partnerships is not considered conjugal partnership property, where the funds so invested are the separate or exclusive property of the wife in accordance with Articles 135 and 148 of the New Civil Code. The income from such investment, however, is conjugal property in accordance with Article 138 of the same Code. Where the property or fund invested, therefore, is income from the separate property of the wife, as this is understood in said Articles 135 and 148 of the Civil Code, said investment partakes of the nature of conjugal partnership property. cdtech Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue