Section 2
SEC. 2. Paragraphs third of subsections (a) and (b) of section twelve of Act Numbered Twenty-eight hundred and thirty-three are hereby amended so as to read as follows: "SEC. 12. (a) Third. The amount of interest paid within the year on its indebtedness, except on indebtedness incurred or continued to purchase or carry obligations or securities the interest upon which is exempt from taxation as income under this Law: Provided, That in the case of bonds or other indebtedness, which have been issued with a guaranty that the interest payable thereon shall be free from taxation, no deduction for the payment of the tax herein imposed, or any other tax paid pursuant to such guaranty, shall be allowed." "SEC. 12. (b) Third. The proportion of the amount of interest paid within the year on its indebtedness, except on indebtedness incurred or continued to purchase or carry obligations or securities the interest upon which is exempt from taxation as income under this law, which the gross amount of its income for the year from sources within the Philippine Islands bears to the gross amount of its income derived from all sources within and without the Philippine Islands: Provided, That in the case of bonds or other indebtedness which have been issued with a guaranty that the of interest payable thereon shall be free from taxation, no ta deduction for the payment of the tax herein imposed or any other tax paid pursuant to such guaranty shall be allowed."