The contribution deduction: where the refunded money comes from
beginner
Automated material · TradeAlmanac editorial deskPrepared by a language model from our stored data and checked by an editor.
The IIA contribution deduction is often described as "the state adds to your investment". The phrasing creates the wrong expectation.
What actually happens
The deduction reduces the taxable base on your other income. With the base reduced, you get back tax that was already withheld from it.
Hence a hard limit: you cannot reclaim more than was paid during the year. Someone with no taxable income reclaims nothing, however much they contribute.
The cap
The deduction is calculated on the contribution but capped at RUB 400,000 a year. A contribution above the cap grows the portfolio without growing the refund.
Which income qualifies
Not all of it. What counts is tax paid on income against which deductions may be applied; dividends are not in that group. Someone whose income consists solely of dividends cannot obtain the contribution deduction.
When to claim
Every year, for each year with a contribution. A missed year can be claimed later within the statutory window, but the later it is, the harder the evidence is to assemble.
What not to confuse
The contribution deduction and the income exemption are different reliefs. The third-generation account grants both, but their conditions differ, and early closure cancels both at once: The third-generation IIA: what it gives and what it restricts.
Sources
- Налоговый кодекс РФ, часть вторая, глава 23
Prepared by a language model from our stored data and checked by an editor.
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