Facilities and privileges furnished by an employer to his employees are not considered as

compensation if such facilities or privileges are or relatively small value and furnished by the
employer merely as a means of promoting the health, goodwill, contentment, or efficiency of his
employees.

TRUE

As a general rule, proceeds of insurance are not taxable because they only constitute a return of
capital (of what was lost) except for proceeds of crop insurance.

TRUE

Income derived from illegal sources, such as gambling, extortion, theft, bribes, embezzlement,
and smuggling are not taxable.

FALSE

SSS and GSIS benefit received is a taxable income.

FALSE

In general, individuals who follow an independent trade, business, or profession, in which they
offer their services to the public, are employees.

FALSE

Pensions, retirement and separation pay constitute compensation unless otherwise exempted by
law.

TRUE

In accounting for gross income of farmers under the accrual basis in contrast to cash basis,
beginning and ending inventories of livestock and farm products raised and purchased are
considered.

TRUE

Holiday pay and hazard pay are exempt from income tax.

TRUE

All GSIS, SSS, PHIC, and HDMF contributions and union dues of individuals are exempt from
income tax.

FALSE

Overtime pay and night shift differential pay are not subject to tax.

FALSE