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Practical Income Manual 2021.

Deduction limit: verification of the financial situation

Regulations: Art. 70 Law Personal Income Tax

The application of this deduction will require that the verified amount of the taxpayer's assets at the end of the tax period exceeds the value shown by its verification at the beginning of the tax period, at least by the amount of the investments made.

For these purposes, the increases or decreases in value experienced during the tax period by the assets that at the end of the period continue to form part of the taxpayer's assets will not be computed.

 The objective of this last requirement is to ensure that the amounts invested with the right to make the deduction come from the income generated in the period, whether or not it is subject to personal income tax, preventing deductions from being made based on amounts that come from income generated. in previous exercises.

Note: Regarding the verification of the financial situation see the comments in the corresponding section of the "Deduction for investment in habitual residence: Transitional regime" in this Chapter.