Section 8Sec./Art. 8

Section 32 of the National Internal Revenue Code of 1997, as amended, is hereby further amended to read as follows:

"Section 32. Gross Income. -

(A) General Definition. - Except when otherwise provided in this Title, gross income means all income derived from whatever source, including (but not limited to) the following items:

(1) Compensation for services in whatever form paid, including, but not limited to fees, salaries, wages, commissions, equity-based compensation, such as stock options, restricted stock units, stock appreciation rights, and similar items: Provided, That equity-based compensation shall be included in the gross income at the time of exercise;

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:

x x x

(7) Miscellaneous Items. -

x x x

(g) Interest Income and Gains from the Sale, Transfer, or Disposition of Project-Specific Bonds. - Specific bonds that are issued by the Republic of the Philippines or any of its instrumentalities to finance capital expenditures or programs covered by the Philippine Development Plan or its equivalent and other high-level priority programs of the national government, as determined by the Secretary of Finance.

(h) gains from Redemption of Shares or Units of Participation in Mutual Fund and Unit Investment Trust Fund. - Gains realized by the investor upon redemption of shares f stock in a mutual fund company as defined in Section 22(BB) of this Code, or units of participation in a Mutual Fund or Unit Investment Trust Fund: Provided, That prior to such redemption, final taxes due on realized gains have been previously withheld at the level of the underlying assets.

x x x."