REPUBLIC ACT NO. 9504 - TAX EXEMPTION OF MINIMUM WAGE EARNERS AND INCREASING PERSONAL/ADDITIONAL EXEMPTIONS / CHANGE IN Optional Standard Deduction

Salient Points:

>“Minimum wage earners” shall be exempt from income tax on their taxable income including holiday pay, overtime, night shift differential pay, and hazard pay

>Increases the amount of personal exemption for all individuals to a fixed amount of P50,000.00 and the additional exemption toP25,000.00 for each dependent, not exceeding four (4)

>Amends Section 34(L) to increase to 40% of gross sales or receipts the Operational Standard Deduction (OSD) allowed to individuals (except nonresident aliens) engaged in business or earning income in the exercise of their profession

> Now allow corporations (except nonresident foreign corporations) to claim OSD, instead of itemized deductions, in an amount not exceeding 40% of their gross income.