Tax Status of Banks

September 21, 1959 BIR RULING NO. 494-59 2nd Indorsement Respectfully returned to the Postmaster General, ATTN .: Chief, Postal Fiscal Service, Postal Savings Bank , Bureau of Posts, Manila, the herein papers bearing on the queries of Messrs. RAUL R. INGLES and CIRILO M. CARIO, dated June 6 and July 28, 1959, respectively. cdt The tax on deposits imposed by the old internal revenue law on banks (section 1499 of the Revised Administrative Code) was already repealed by Commonwealth Act No. 466, otherwise known as The National Internal Revenue Code. The tax status of banks is now defined by Chapter I, Title VIII, of the National Internal Revenue Code. It will be observed, therefore, that, while section 1994 of the Revised Administrative Code still exists, it finds no more application. It may be stated in this connection that, even under the new law, the Postal Savings Bank remains exempt from tax. It may be stated further that, even under the old law, income deposited in the Postal Savings Bank, including the interest earned on such deposit, were subject to the income tax. The exemption provision of section 1994 of the Revised Administrative Code refers only to the tax otherwise payable by the Bank on deposits received by it which were then subjected to tax by repealed provision of section 1499 of the same Code. The queries of Messrs. Ingles and Cario are, therefore, accordingly answered. cdta (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue