What changes in the IR after exemption for those who earn up to R$ 2,640

Income tax

Measure that was in effect on a temporary basis, was approved this Wednesday (24) by Congress

The Senate approved on Thursday (24) the provisional measure (MP) that expands the Income Tax (IR) exemption range for those who earn up to R$ 2,640, the equivalent of two minimum wages (R$ 1,320) in 2023 .

With that, the bill, which had been in effect on a transitory basis since May, is converted into law, goes on to be sanctioned by President Luiz Inácio Lula da Silva and makes the rules definitive.

The rest of the IR table does not change and the other income brackets continue with the same rates, which vary from 7.5% to 27.5%.

The expansion in the exemption range, however, changes the calculation base and indirectly benefits all the others, who start to pay a slightly lower amount of tax with the change.

who was exempt

Before the change, everyone who earned up to R$ 1,903.98 was exempt from income tax.

The measure increased this floor to R$ 2,112.

However, the new system already provides for a fixed monthly deduction of BRL 528 from the salary, which will be automatically applied to these people.

What this deduction does is reduce the amount of total income received by the person who will be subject to the IR application.

With the subtraction of these BRL 528, whoever earns BRL 2,640 gains the right to be taxed only on the amount of exactly BRL 2,112 – and, therefore, will be exempt.

Taxpayers who are within this range will not need to do anything and their payments will already be made free of any IR deduction at source.

The rule had been in effect since May, when the government published the provisional measure, and wages were already being deducted using the new methodology.

Senate approval now only ensured that the rules become permanent and it is not necessary to return to the previous table.

Optional discount for all

The R$528 deduction is optional and can be used by any taxpayer who wants to join it.

According to the Federal Revenue, however, it is only beneficial for those who earn up to around R$ 5,000.

From that range, people are already entitled to greater discounts, which compensate more.

This is the case for those who have many private expenses with health, education and also with dependents, for example, which can be deducted from tax in the complete declaration model.

Everyone pays a little less

Even if there is no change in the table, the change in the floor, for the base R$ 2,112, means that everyone else ends up paying a little less in income tax as well.

This happens because the rates in the table are only applied to values ​​that exceed the previous range.

A person earning BRL 2,700, for example, is still charged the same rate, which was and remains 7.5% in this range.

But with the deduction of BRL 528, the taxable amount drops to BRL 2,172.

The 7.5% discount, in turn, will only be applied to the amount of this total that exceeds the floor of BRL 2,112 – that is, BRL 60 (2,172 – 2,112). The maximum tax that person will pay is BRL 4.50 per month.

*With information from CNN Brazil

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