REPUBLIC ACT NO. 10653

FEB
12
2015

RA 10653: Increasing the Tax Exemption Cap for 13th Month Pay, Christmas Bonus and Other Benefits from P30,000 to P82,000

Republic of the Philippines
Congress of the Philippines
Metro Manila
Sixteenth Congress
Second Regular Session

Begun and held in Metro Manila, on Monday, the twenty-eighth day of July, two thousand fourteen.

[REPUBLIC ACT NO. 10653]

AN ACT ADJUSTING THE 13TH MONTH PAY AND OTHER BENEFITS CEILING EXCLUDED FROM THE COMPUTATION OF GROSS INCOME FOR PURPOSES OF INCOME TAXATION, AMENDING FOR THE PURPOSE SECTION 32(B), CHAPTER VI OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. Section 32(B), Chapter VI of the National Internal Revenue Code of the Philippines (Republic Act No. 8424) is hereby amended as follows:

“SEC. 32. Gross Income.

“x x x

“(B) Exclusions from Gross Income. — The following items shall not be included in gross income and shall be exempt from taxation under this Title:

“xxx

“(7) Miscellaneous Items. — “xxx

“(e) 13th Month Pay and Other Benefits. — Gross benefits received by officials and employees of public and private entities: Provided, however, That the total exclusion under this subparagraph shall not exceed eighty-two thousand pesos (P82,000) which shall cover:

“xxx

“(iv) Other benefits such as productivity incentives and Christmas bonus: Provided, That every three (3) years after the effectivity of this Act, the President of the Philippines shall adjust the amount herein stated to its present value using the Consumer Price Index (CPI), as published by the National Statistics Office (NSO).”

SECTION 2. Implementing Rules and Regulations. — The Secretary of Finance shall promulgate the necessary rules and regulations for the faithful and effective implementation of the provisions of this Act: Provided, That, the failure of the Secretary of Finance to promulgate the said rules and regulations shall not prevent the implementation of this Act upon its effectivity.

SECTION 3. Repealing Clause. — All laws, orders, issuances, circulars, rules and regulations or parts thereof which are inconsistent with the provisions of this Act are hereby repealed or modified accordingly.

SECTION 4. Separability Clause. — If any provision of this Act is declared unconstitutional or invalid, other parts or provisions hereof not affected thereby shall continue to be in full force and effect.

SECTION 5. Effectivity. — This Act shall take effect fifteen (15) days following its publication in at least two (2) newspapers of general circulation.

Approved,

(Sgd.) FRANKLIN M. DRILON
President of the Senate
(Sgd.) FELICIANO BELMONTE JR.
Speaker of the
House of Representatives

This Act which is a consolidation of House Bill No. 4970 and Senate Bill No. 2437 was finally passed by the House of Representatives and the Senate on December 1, 2014 and November 26, 2014, respectively.

(Sgd.) OSCAR G. YABES
Secretary of the Senate
(Sgd.) MARILYN B. BARUA-YAP
Secretary General
House of Representatives

Approved: February 12, 2015

(Sgd.) BENIGNO S. AQUINO III
President of the Philippines

RESOURCES:
• [PDF] Republic Act No. 10653, February 12, 2015

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