Section 5Sec./Art. 5

The opening paragraph of Section 29 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows:

"In computing taxable income subject to tax under Sections 21(a); 24(a), (b), and (c); and 25(a)(1), there shall be allowed as deductions the items specified in paragraphs (a) to (i) of this section:Provided however,That, in computing taxable income subject to tax under Section 21(f) in the case of individuals engaged in business or practice of profession, only the following direct costs shall be allowed as deductions:

"(a) Raw materials, supplies and direct labor;

"(b) Salaries of employees directly engaged in activities in the course of or pursuant to the business or practice of their profession;

"(c) Telecommunications, electricity, fuel, light and water;

"(d) Business rental;

"(e) Depreciation;

"(f) Contributions made to the Government and accredited relief organizations for the rehabilitation of calamity-stricken areas declared by the President; and

"(g) Interest paid or accrued within a taxable year on loans contracted from accredited financial institutions which must be proven to have been incurred in connection with the conduct of a taxpayer's profession, trade or business.

"For individuals whose cost of goods sold and direct costs are difficult to determine, including professionals as herein defined, a maximum of forty percent (40%) of their gross receipts shall be allowed as deductions to answer for business or professional expenses as the case may be."