State Duma approves tax deduction for long-term savings
The single tax deduction will apply to funds deposited in the individual investment account of type 3 (Type 3 IIA), contributions to the long-term savings programme and contributions under non-governmental pension agreements. The State Duma approved amendments to the Tax Code in the second and third readings. The law is retroactive and will apply to agreements that have been concluded starting from 1 January 2024.
Contributions up to ₽400,000 per year for all three products are exempt from personal income tax. Thus, the maximum annual deduction may range from ₽52,000 to ₽60,000 depending on the amount of an investor’s personal income.
The draft law also provides for the transformation of ‘old’ investment accounts into new ones and for a gradual increase in the minimum holding period of Type 3 IIA. The minimum holding period of an account opened between 2024 and 2026 will be five years, and subsequently it will be increased by one year until reaching ten years.