AN ACT ADJUSTING THE 13 TH MONTH PAY AND OTHER BENEFITS CEILING EXCLUDED FROM THE COMPUTATION OF GROSS INCOME FOR PURPOSES OF INCOME TAXATION

Case Overview and Summary

Summary of Republic Act No. 10653

Adjusting the 13th Month Pay and Other Benefits Ceiling Excluded from Gross Income Computation for Income Taxation

- Amends Section 32(B)(7)(e) of the National Internal Revenue Code of 1997 regarding exclusions from gross income for taxation purposes.

- Exclusions from Gross Income:
• Gross benefits received by officials and employees of public and private entities, including 13th month pay, productivity incentives, and Christmas bonus, shall be excluded from gross income up to P82,000. (Section 1)
• The P82,000 ceiling shall be adjusted every 3 years to its present value using the Consumer Price Index published by the National Statistics Office. (Section 1)

- Implementing Rules and Regulations:
• The Secretary of Finance shall promulgate the necessary rules and regulations for the law's implementation, but failure to do so shall not prevent the law's effectivity. (Section 2)

- Repealing Clause:
• All laws, orders, issuances, circulars, rules and regulations inconsistent with this Act are repealed or modified accordingly. (Section 3)

- Separability Clause:
• If any provision is declared unconstitutional or invalid, other unaffected provisions shall remain in full force and effect. (Section 4)

- Effectivity:
• This Act shall take effect 15 days after its publication in at least two newspapers of general circulation. (Section 5)