INCLUSIONS AND EXCLUSIONS FROM GROSS INCOME 02/18/20140 Comments
Section 32 A! " INCLUSION# me$nin% t&e' $(e )$(t o* t&e %(oss income $n+ $(e &ence t$,$-.e
Un+e( Section 32 A!# E,ce)t &en ot&e(ise )(oi+e+ in t&is it.e# %(oss income me$ns $.. income +e(ie+ *(om AE5ER SOURCE# SOURCE# inc.6+in%# -6t not .imite+ to t&e *o..oin% items
1! Com)ens$tion *o( se(ices in &$tee( *o(m )$i+# inc.6+in%# -6t not .imite+ to *ees# s$.$(ies# $%es# commissions# $n+ simi.$( items7 2! G(oss income +e(ie+ *(om t&e con+6ct o* t($+e o( -6siness o( t&e e,e(cise e,e(c ise o* $ )(o*ession7 3! G$ins +e(ie+ *(om +e$.in%s in )(o)e(t'7 4! Inte(ests7 ! Rents7 9! Ro'$.ties7 :! Dii+en+s7 8! Ann6ities7 ;! <(i=es $n+ innin%s7 10! s +ist(i-6tie s&$(e *(om t&e net income o* t&e %ene($. )(o*ession$. )$(tne(s&i)?
&6s# t&e )e(tinent items o* %(oss %(oss income &en e$(ne+ -' $n RC it&in it&in $n+ it&o6t!# NRC it&in!# RA it&in!# NRAE@ it&in! s&$.. -e (e)o(te+ $n+ s&$.. *o(m )$(t o* t&ei( income? <.e$se t$e note t&$t $, $, Co+e +i+ not +istin%6is& t&e so6(ce o* t&e t&e income? &e +eBnition +i+ sim).' sim).' )(oi+e *o( *o( AE5ER A E5ER SOURCE? So t&is me$ns t&$t t&e income een )(ocee+in% )(ocee+in% *(om *(om i..e%$. so6(ces .ie i..e%$. %$m-.in%# -(i-es# ic-$cs is sti.. t$,$-.e $n+ nee+s to -e (e)o(te+ in t&e Income $, Ret6(n?
Im)o(t$nt )oints to (emem-e( Item 1 " Com)ens$tion " t&e +esi%n$tion o* t&e income is imm$te(i$.# t&e em).o'e( $n+ em).o'ee m$' c$.. t&e s$.$('/$%e $s $n't&in% -6t LO5E is not si%niBc$nt? &e s$me -ein% -ein% consi+e(e+ consi+e(e+ $s com)ens$tion? com)ens$tion?
Item 2 " G(oss income 6n+e( 6 n+e( t&is item me$ns G(oss S$.es .ess Cost o* S$.es *o( se..e( o* %oo+s! o( G(oss Recei)ts .ess Cost o* Se(ice *o( se..e( o* se(ice!? O* co6(se# $*te( $*te( consi+e(in% t&e +isco6nts# $..o$nces $..o$nces o( (et6(ns?
Item 3 " &e %$ins t&$t *o(ms )$(t o* t&e %(oss income $(e t&ose e$(ne+ *(om t&e s$.e o( +is)osition o* o(+in$(' $ssets? &e %$ins *(om t&e s$.e s$.e o* c$)it$. $ssets $(e t&e(e*o(e not inc.6+e+ -ec$6se t&e s$me $(e s6-ecte+ to Bn$. t$,? <.e$se see Section 3; $n+ Reen6e Re%6.$tions Re%6.$tions :"2003 *o( *o( (e*e(ence? M' $e $e s&$.. on on O(+in$(' s? C$)it$. Assets is some&e(e -6(ie+ e.se&e(e?
Item 4 " &ose inte(ests t&$t e(e NO s6-ecte+ to Bn$. t$, $(e )$(t o* t&e %(oss income? &e inte(est e$(ne+ on t&e )$6t$n% o* t&e @6m-$' *(om *(om t&e m$+$.$n% )eo).e is t$,$-.e? t$,$-.e? On t&e ot&e( &$n+# t&e inte(est e$(ne+ e$(ne+ -' t&e @6m-$' on &is -$n +e)osits $(e NO )$(t o* t&e %(oss income " $.(e$+' s6-ecte+ to Bn$. t$,!
Item " O* co6(se# t&e (ents *o(m *o(m )$(t o* t&e %(oss %(oss income? In t&is c$se# it s&o6.+ -e %(oss (ent$.s .ess cost# e?%? +e)(eci$tion# s$.$(ies# m$inten$nce# etc?
Item 9"10 " &ose income t&$t t& $t e(e not s6-ecte+ to Bn$. t$, *o(ms )$(t o* t&e %(oss income? &is is t(ic' t(ic' t&o6%& $n+ 'o6 s&o6.+ -e $n$.'tic$. $n$.'tic$. $n+ e(' c$(e*6.? &e st$t6s o* t&e t$,)$'e( s&o6.+ -e t$en into consi+e($tion? E,$m).e I* AA is $ RC income it&in $n+ it&o6t! (eceies (o'$.t' *(om $-(o$+# e$(ns inte(est income *(om &is .o$n e,ten+e+ to non"(esi+ents# $n+ t&e ot&e( income &et&e( o( not s6-ecte+ to Bn$. t$, i* t&e s$me is *(om $-(o$+ *o(ms *o(ms )$(t o* t&e %(oss income? income? On t&e ot&e( &$n+# i* s6c& e(e e(e e$(ne+ -' t&e NRC# RA# RA# NRAE@# t&e income t&e(e*o(e $(e not t$,$-.e since t&e' $(e t$,$-.e on.' on on t&e income e$(ne+ it&in? it&in? So in essence# t&e so6(ce s&o6.+ $.$'s -e consi+e(e+ $n+ &o is t&e t$,)$'e( t$,)$'e(??
Item 11 " Since t&e %ene($. )(o*ession$. )$(tne(s&i) G<
SECION 32 @! " EXCLUSIONS FROM GROSS INCOME e,em)t *(om t$,$tion! 1! Li*e Ins6($nce? " &e )(ocee+s o* .i*e ins6($nce )o.icies )$i+ to t&e &ei(s o( -eneBci$(ies 6)on t&e +e$t& o* t&e ins6(e+# &et&e( in $ sin%.e s6m o( ot&e(ise# -6t i* s6c& $mo6nts $(e &e.+ -' t&e ins6(e( 6n+e( $n $%(eement to )$' inte(est t&e(eon# t&e inte(est )$'ments s&$.. -e inc.6+e+ in %(oss income?
2! Amo6nt Receie+ -' Ins6(e+ $s Ret6(n o* <(emi6m? " &e $mo6nt (eceie+ -' t&e ins6(e+# $s $ (et6(n o* )(emi6ms )$i+ -' &im 6n+e( .i*e ins6($nce# en+oment# o( $nn6it' cont($cts# eit&e( +6(in% t&e te(m o( $t t&e m$t6(it' o* t&e te(m mentione+ in t&e cont($ct o( 6)on s6((en+e( o* t&e cont($ct?
3! Gi*ts# @e6ests# $n+ Deises? &e $.6e o* )(o)e(t' $c6i(e+ $c6i(e+ -' %i*t# -e6est# +eise# o( +escent <(oi+e+# &oee(# &$t income *(om s6c& )(o)e(t'# $s e.. $s %i*t# -e6est# +eise o( +escent o* income *(om $n' )(o)e(t'# in c$ses o* t($ns*e(s o* +ii+e+ inte(est# s&$.. -e inc.6+e+ in %(oss income?
4! Com)ens$tion *o( In6(ies o( Sicness? " $mo6nts (eceie+# t&(o6%& Acci+ent o( e$.t& Ins6($nce o( 6n+e( o o(men>s (men>s Com)ens$tion Acts# $s com)ens$tion *o( )e(son$. in6(ies o( sicness# ).6s t&e $mo6nts o* $n' +$m$%es (eceie+# &et&e( -' s6it o( $%(eement# on $cco6nt o* s6c& in6(ies o( sicness?
! Income E,em)t 6n+e( (e$t'? " Income o* $n' in+# to t&e e,tent (e6i(e+ -' $n' t(e$t' o-.i%$tion -in+in% 6)on t&e Goe(nment o* t&e <&i.i))ines?
9! Reti(ement @eneBts#
$! Reti(ement -eneBts (eceie+ 6n+e( Re)6-.ic Act No? :941 $n+ t&ose (eceie+ -' oci$.s $n+ em).o'ees o* )(i$te B(ms# &et&e( in+ii+6$. o( co()o($te# in $cco(+$nce it& $ (e$son$-.e )(i$te -eneBt ).$n m$int$ine+ -' t&e em).o'e( <(oi+e+# &$t t&e (eti(in% oci$. o( em).o'ee &$s -een in t&e se(ice o* t&e s$me em).o'e( *o( $t .e$st ten 10! 'e$(s $n+ is not .ess t&$n B*t' 0! 'e$(s o* $%e $t t&e time o* &is (eti(ement <(oi+e+# *6(t&e(# &$t t&e -eneBts %($nte+ 6n+e( t&is s6-)$($%($)& s6-)$($%($)& s&$.. -e $$i.e+ o* -' $n oci$. o( em).o'ee on.' once? Fo( )6()oses o* t&is S6-section# t&e te(m >(e$son$-.e )(i$te -eneBt ).$n> me$ns $ )ension# %($t6it'# stoc -on6s o( )(oBt"s&$(in% ).$n m$int$ine+ -' $n em).o'e( *o( t&e -eneBt o* some o( $.. o* &is oci$.s o( em).o'ees# &e(ein cont(i-6tions $(e m$+e -' s6c& em).o'e( *o( t&e oci$.s o( em).o'ees# o( -ot&# *o( t&e )6()ose o* +ist(i-6tin% to s6c& oci$.s $n+ em).o'ees t&e e$(nin%s $n+ )(inci)$. o* t&e *6n+ t&6s $cc6m6.$te+# $n+ &e(ein its is )(oi+e+ in s$i+ ).$n t&$t $t no
time s&$.. $n' )$(t o* t&e co()6s o( income o* t&e *6n+ -e 6se+ *o(# o( -e +ie(te+ to# $n' )6()ose ot&e( t&$n *o( t&e e,c.6sie -eneBt o* t&e s$i+ oci$.s $n+ em).o'ees?
-! An' $mo6nt (eceie+ -' $n oci$. o( em).o'ee o( -' &is &ei(s *(om t&e em).o'e( $s $ conse6ence o* se)$($tion o* s6c& oci$. o( em).o'ee *(om t&e se(ice o* t&e em).o'e( -ec$6se o* +e$t& sicness o( ot&e( )&'sic$. +is$-i.it' o( *o( $n' c$6se -e'on+ t&e cont(o. o* t&e s$i+ oci$. o( em).o'ee?
c! &e )(oisions o* $n' e,istin% .$ to t&e cont($(' notit&st$n+in%# soci$. sec6(it' -eneBts# (eti(ement %($t6ities# )ensions $n+ ot&e( simi.$( -eneBts (eceie+ -' (esi+ent o( non(esi+ent citi=ens o* t&e <&i.i))ines o( $.iens &o come to (esi+e )e(m$nent.' in t&e <&i.i))ines *(om *o(ei%n %oe(nment $%encies $n+ ot&e( instit6tions# )(i$te o( )6-.ic?
+! <$'ments o* -eneBts +6e o( to -ecome +6e to $n' )e(son (esi+in% in t&e <&i.i))ines 6n+e( t&e .$s o* t&e Unite+ St$tes $+ministe(e+ -' t&e Unite+ St$tes 5ete($ns A+minist($tion?
e! @eneBts (eceie+ *(om o( eno'e+ 6n+e( t&e Soci$. Sec6(it' S'stem in $cco(+$nce it& t&e )(oisions o* Re)6-.ic Act No? 8282?
*! @eneBts (eceie+ *(om t&e GSIS 6n+e( Re)6-.ic Act No? 82;1# inc.6+in% (eti(ement %($t6it' (eceie+ -' %oe(nment oci$.s $n+ em).o'ees?
:!Misce..$neo6s Items? "
$! Income De(ie+ -' Fo( Fo(ei%n ei%n Goe(nment? " Income +e(ie+ *(om inestments in t&e <&i.i))ines in .o$ns# stocs# -on+s o( ot&e( +omestic sec6(ities# o( *(om inte(est on +e)osits in -$ns in t&e <&i.i))ines -' i! *o(ei%n %oe(nments# ii! Bn$ncin% instit6tions one+# cont(o..e+# o( eno'in% (eBn$ncin% *(om *o(ei%n %oe(nments# $n+ iii! inte(n$tion$. o( (e%ion$. Bn$nci$. instit6tions est$-.is&e+ -' *o(ei%n %oe(nments?
-! Income De(ie+ -' t&e Goe(nment o( its
c! <(i=es $n+ A$(+s? " <(i=es $n+ $$(+s m$+e )(im$(i.' in (eco%nition o* (e.i%io6s# c&$(it$-.e# scientiBc# e+6c$tion$.# $(tistic# .ite($('# o( ciic $c&ieement -6t on.' i*
i! &e (eci)ient $s se.ecte+ it&o6t $n' $ction on &is )$(t to ente( t&e contest o( )(ocee+in%7 $n+ ii! &e (eci)ient is not (e6i(e+ to (en+e( s6-st$nti$. *6t6(e se(ices $s $ con+ition to (eceiin% t&e )(i=e o( $$(+?
+! <(i=es $n+ A$(+s in s)o(ts Com)etition? " A.. )(i=es $n+ $$(+s %($nte+ to $t&.etes in .oc$. $n+ inte(n$tion$. s)o(ts com)etitions $n+ to6(n$ments &et&e( &e.+ in t&e <&i.i))ines o( $-(o$+ $n+ s$nctione+ -' t&ei( n$tion$. s)o(ts $ssoci$tions?
e! 13t& Mont& <$' $n+ Ot&e( @eneBts? " G(oss -eneBts (eceie+ -' oci$.s $n+ em).o'ees o* )6-.ic $n+ )(i$te entities <(oi+e+# &oee(# &$t t&e tot$. e,c.6sion 6n+e( t&is s6-)$($%($)& s&$.. not e,cee+ &i(t' t&o6s$n+ )esos <30#000! &ic& s&$.. coe(
i! @eneBts (eceie+ -' oci$.s $n+ em).o'ees o* t&e n$tion$. $n+ .oc$. %oe(nment )6(s6$nt to Re)6-.i Re)6-.ic c Act No? 99897 ii! @eneBts (eceie+ -' em).o'ees )6(s6$nt to <(esi+enti$. Dec(ee No? 81# $s $men+e+ -' Memo($n+6m O(+e( No? 28# +$te+ A6%6st 13# 1;897 iii! @eneBts (eceie+ -' oci$.s $n+ em).o'ees not coe(e+ -' <(esi+enti$. +ec(ee No? 81# $s $men+e+ -' Memo($n+6m O(+e( No? 28# +$te+ A6%6st 13# 1;897 $n+ i! Ot&e( -eneBts s6c& $s )(o+6ctiit' incenties $n+ C&(istm$s -on6s <(oi+e+# *6(t&e(# &$t t&e cei.in% o* &i(t' t&o6s$n+ )esos <30#000! m$' -e inc(e$se+ t&(o6%& (6.es $n+ (e%6.$tions iss6e+ -' t&e Sec(et$(' o* Fin$nce# Fin$nce# 6)on (ecommen+$tion o* t&e Commissione(# $*te( consi+e(in% $mon% ot&e(s# t&e eHect on t&e s$me o* t&e in$tion ($te $t t&e en+ o* t&e t$,$-.e 'e$(?
*! GSIS# SSS# Me+ic$(e $n+ Ot&e( Cont(i-6tions? " GSIS# SSS# Me+ic$(e $n+ <$%"i-i% <$%"i-i % cont(i-6tions# $n+ 6nion 6n ion +6es o* in+ii+6$.s?
%! G$ins *(om t&e S$.e o* @on+s# De-ent6(es o( ot&e( Ce(tiBc$te o* In+e-te+ness? " G$ins (e$.i=e+ *(om t&e s$me o( e,c&$n%e o( (eti(ement o* -on+s# +e-ent6(es o( ot&e( ce(tiBc$te o* in+e-te+ness it& $ m$t6(it' o*
mo(e t&$n Be ! 'e$(s?
&! G$ins *(om Re+em)tion o* S&$(es in M6t6$. F6n+? " G$ins (e$.i=e+ -' t&e inesto( 6)on (e+em)tion o* s&$(es o* stoc in $ m6t6$. *6n+ com)$n' $s +eBne+ in Section 22 @@! o* t&is Co+e?
