EXCLUSIONS TO GROSS INCOME
Proceeds from Life Insurance
Amount received as
Return of Premium
Gifts, Bequests, and Legacies
Compensation from illness or injury
Income exempt under treaty
Retirement Benefits
Miscellaneous
A. Income received by foreign government
form their investment in the Philippines
B. Income derived by the Government of the
Philippines or any political subdivision from
any public utility or from the exercise of any
essential Governmental Function
Insurance is a contract of Indemnity: The proceeds are indemnity not
gain or profit
Treated as return of capital
To be taxed under Estate tax
Compensatory, not gain or profit; adds nothing to injured/ill
By operation of law; by our adherence to the Generally Accepted
Principles of International law
A. those received by officials and employees of private firms,
individuals and corporations. Reqs:
1. reasonable private plan maintained by the employer duly approved
by the BIR to the exclusive benefit of member-employees.
2. Retiring official @ least 10yrs service
3. @least 50 y.o. @ time of retirement
4. may be availed of only once
B. paid to employees who have reached the age of 60 or more but not
beyond 65 yrs with @ least 5 years of credited service
To lessen the burden of foreign loans inasmuch as the interest of these loans are, by
contractual arrangement, borne by the domestic borrowers. Foreign governments
include financing institutions owed, controlled and financed by them and international
or regional financing institutionsestablished by governments.
C. Prizes and Awards →
D. Prizes and awards in sports competition
granted to athletes whether held in the
Philippines or abroad and sanctioned by their
national sports associations. →
I. received in recognition of religious, charitable, scientific, educational, artistic, literary
or civic achievement
II. Recipient was selected without any action on his part enter the contest or proceeding;
III. Recipient is not required to render substantial future services as a condition to
receiving the prize or award
National sports associations must be accredited by the Philippine Olympic Commitee

E. 13th- month pay and other benefits I. other benefits cover the productivigty incentives and Christmas bonus;
II. Total exclusion shall not exceed P90,000.00.

F. GSIS, SSS, Medicare and other

contributions

G. Gains from the sale or exchange of

retirement of bonds, debentures, or other
certificate of indebtedness with a maturity of
more than five years.

H. Gains from redemption of shares in Mutual

Fund Compan