Exclusions from Gross Income

• Exclusions from gross income - income which will not be subject to income tax. They are not included in gross income subject to regular tax, capital gains tax, or final tax.
• Under the Sec. 32 (B) of the NIRC, the following items shall not be included in gross income and shall be exempt from taxation:

  1. Proceeds of life insurance policy;
  2. Amount received by the insured as a return of premium;
  3. Gift, bequest, devise, or descent;
  4. Compensation for injuries or sickness;
  5. Income exempt under treaty;
  6. Retirement benefits; and
  7. Miscellaneous Items
• Miscellaneous items:

  1. Income in the Philippines of Foreign Government or foreign GOCCs;
  2. Income of the government and its political subdivisions;
  3. Prizes and awards in recognition of religious, charitable, scientific, educational, artistic, literary, or civic achievements;
  4. Prizes and awards in athletic sports competitions;
  5. Contributions to GSIS, SSS, PhilHealth, Pag-IBIG, and union dues;
  6. Employer's contributions to PERA;
  7. PERA investment income and PERA distributions;
• Other miscellaneous items:

  1. 13th month pay and other benefits not exceeding P90,000;
  2. Gains from sales of bonds, debentures, or certificates of indebtedness with maturity of more than 5 years;
  3. Gains from redemption of shares in mutual fund; and
  4. Income derived from the sale of gold pursuant to RA7076 or the People's Samll-Scale Mining Act of 1991