Income tax exemption is a highly sought-after benefit, and not everyone knows all the rules for taking advantage of it. Come see what the requirements are and what changes are likely to be implemented soon!
General exemption range for workers
Until April 2025, the monthly income tax exemption threshold was up to R$ 2,259.20, with progressive tax rates applicable beyond that amount. However, after the minimum wage was adjusted to R$ 1,518 in 2025, the government adjusted this threshold, at least until May, maintaining the exemption for those earning up to R$ 3,036 per month, equivalent to two minimum wages
Proposal to increase the exemption: up to R$ 5,000
A significant milestone is underway: the government has sent a draft bill to Congress proposing a total income tax exemption for those earning up to R$ 5,000 per month, with partial exemption for those earning between R$ 5,000 and R$ 7,000. If approved, the measure will take effect in 2026, benefiting approximately 10 million Brazilians with total exemption, and others with reduced tax rates.
Benefits for retirees and pensioners over 65 years of age
In addition to this general exemption, retirees and pensioners aged 65 or older are entitled to an additional tax-exempt portion. Now in 2025, this extra amount is R$ 1,903.98 per month, resulting in up to R$ 22,847.76 per year free of taxation. In specific cases involving INSS (Brazilian Social Security Institute), the double exemption already totals approximately R$ 49,810.96 per year
Exemption for serious illnesses
Retired taxpayers or even pensioners diagnosed with serious illnesses (such as cancer, AIDS, serious heart disease, multiple sclerosis, Parkinson's disease) are exempt from income tax on their retirement, pension, or disability income. Obtaining this status requires the presentation of an official medical report and formalization with the paying agency.
Released from the obligation to declare
Even without tax exemption on the discount, some people are exempt from filing an income tax return:
- Those who had taxable income below R$ 33,888 in the year (equivalent to approximately R$ 2,824 per month)
- Anyone who had income that was exempt from taxation or taxed exclusively at the source, totaling up to R$ 200,000 in the year.
- Anyone who had assets (such as real estate or investments) valued at up to R$ 800,000 on December 31, 2024
- Farmers with gross annual revenue of up to R$ 169,440
- People with serious illnesses, retirees, and other groups already mentioned may also be exempt, depending on the situation
Other information regarding the exemption
In addition to income brackets and retirees, there are other groups that can benefit from income tax exemption. People with serious illnesses, such as cancer, AIDS, serious heart disease, multiple sclerosis, and Parkinson's disease, are entitled to exemption on retirement, pension, or disability income, provided they present an official medical report proving their condition. Rural producers with gross annual revenue below a specific limit may also be exempt from filing a tax return or paying the tax. Furthermore, taxpayers who receive income exclusively from financial investments taxed at source may not need to file a return, depending on the total amount. The exemption also applies to those who own assets of limited value or income below the annual ceiling. These rules aim to protect the most vulnerable taxpayers, ensuring that people with lower economic capacity or in special situations are not burdened by the tax, promoting fiscal justice and social inclusion.
Key points
- Current exemption threshold: up to R$ 2,259.20 (with expected adjustment up to R$ 3,036)
- Proposal under discussion: exemption up to R$ 5,000, partial exemption up to R$ 7,000 starting in 2026.
- Special groups: seniors (over 65 years old) and those with serious illnesses have
- Exempt from filing: those who earn little, own few assets, or meet specific criteria.