Taxation Law Question: X

True or False. (1% each)

1. Gains realized by the investor upon redemption of shares of stock in a mutual fund company are exempt from income tax.

2. A corporation can claim the optional standard deduction equivalent to 40% of its gross sales or receipts, as the case may be.

3. Premium payment for health insurance of an individual who is an employee in an amount of P2,500 per year may be deducted from gross income if his gross salary per year is not more than P250,000.

4. The Tax Code allows an individual taxpayer to pay in two equal installments, the first installment to be paid at the time the return is filed, and the second on or before July 15 of the same year, if his tax due exceeds P2,000.

5. An individual taxpayer can adopt either the calendar or fiscal period for purposes of filing his income tax return.

6. The capitalization rules may be resorted to by the BIR in order to compel corporate taxpayers to declare dividends to their stockholders regularly.

7. Informer’s reward is subject to a final withholding tax of 10%.

8. A non-resident alien who stays in the Philippines for less than 180 days during the calendar year shall be entitled to personal exemption not to exceed the amount allowed to citizens of the Philippines by the country of which he is subject or citizen.