Analytical guide: how to declare LCI, LCA and debentures encouraged in Income Tax 2026

Fixed income exempt from Income Tax constitutes a significant portion of investment portfolios in Brazil, attracting investors due to its tax efficiency combined with the predictability of returns. Instruments such as Real Estate Credit Letters (LCI), Agribusiness Credit Letters (LCA) and Incentive Debentures (infrastructure) are essential financing mechanisms for strategic sectors of the national economy. Although the benefit of the zero rate is the main attraction, the tax exemption does not exempt the taxpayer from the obligation to report the ownership and income of these assets in the annual adjustment. Omission or incorrect completion can generate pending issues in the fine mesh, as financial institutions report all transactions directly to the Tax Authorities through e-Financeira.

How tax exemption works on fixed income

The tax exemption granted to certain fixed income assets is not a random benefit, but a public policy designed to stimulate funding for specific sectors. In the case of LCIs and LCAs, the government encourages credit for the real estate market and agribusiness, respectively. Incentivized debentures, governed by Law 12,431/2011, aim to raise private resources for large infrastructure works, such as energy, sanitation and logistics.

For individual investors, the exemption applies to income (interest and monetary correction) and, in the specific case of incentivized debentures, also to capital gains on disposal in the secondary market, as long as legal requirements are met. However, it is crucial to distinguish two distinct moments in the annual adjustment declaration:

Balance and Possession: The amount invested (the principal) must be declared to justify the composition of the assets;

Yields: The profits obtained (whether due to semi-annual coupons, amortizations or maturity of the security) must be reported as “Exempt and Non-Taxable Income”, justifying the equity increase in the period;

Critical factors in declaring exempt assets

The accuracy in filling out the 2026 Income Tax declaration (referring to the calendar year 2025) directly depends on the quality of the information consolidated in the Income Report provided by banks and brokers. There are technical factors that require extra attention:

Data Convergence: The amount reported by the taxpayer must be identical to that reported by the financial institution. Cent divergences are generally tolerated, but significant differences trigger the IRS’s automatic filters;

Titles with deficiency vs. liquidity: LCIs and LCAs issued from 2024 onwards underwent regulatory changes by the National Monetary Council (CMN), with an extension of the minimum grace periods (9 months for LCI and 12 months for LCA). This impacts liquidity and, consequently, the moment in which income is actually realized and declared;

Specific codes: Using the incorrect code in the “Assets and Rights” form or in the “Income” form may make processing the declaration difficult.

Regulatory scenario and procedures for 2026

The process of how to declare LCI, LCA and debentures encouraged in the 2026 income tax follows a structured logic that separates the stock (assets) from the flow (income). Below, the technical procedure based on the standard layout of the Federal Revenue program is detailed.

Declaration of ownership (Balance invested)

All fixed income securities in custody on 12/31/2025 must be declared in the “Assets and Rights” form.

Group: Select “04 – Applications and Investments”;

Code for LCI/LCA: Select “03 – Tax-exempt securities (LCI, LCA, CRI, CRA, LIG, Infrastructure Debentures and others)”;

Discrimination: Enter the name of the title, name of the issuing institution, CNPJ of the institution and account/brokerage number. If the title was acquired in 2025, mention the purchase date;

Situation on 12/31/2024 and 12/31/2025: Fill in the acquisition cost values. Important: In fixed income, it is recommended to maintain the value invested in the field of assets, recording the appreciation only in the income form when there is redemption or maturity, unless there is specific guidance in the income report to “mark to market”.

Declaration of profits (Income)

The amounts received from interest, coupons or positive difference upon redemption must be declared in the “Exempt and Non-Taxable Income” form.

Code: The code “12 – Income from savings accounts, mortgage bills, LCI and LCA” is generally used;

For Incentive Debentures: Use the code “26 – Others” (if there is no specific code updated in the 2026 program), specifying in the description “Income from Incentive Debentures – Law 12,431”. The generator program may present a specific item depending on the annual update;

Beneficiary and Paying Source: Select the holder (or dependent) and enter the CNPJ of the paying source as shown in the Income Report.

Frequently asked questions about fixed income exempt from IRPF

1. Do I need to declare LCI or LCA if I didn’t make any redemptions in 2025?

Yes. Declaring ownership of the asset in the “Assets and Rights” form is mandatory if the balance exceeds the minimum limit established by the Revenue (generally R$ 140.00, but the current year’s rule must be checked), even if there has been no cash generation or realized income.

2. Does the exemption for incentivized debentures cover the capital gain on early sale?

Yes. For individuals, the zero Income Tax rate on infrastructure debentures (Law 12,431) applies to both periodic income (interest) and capital gains earned on the sale of the asset in the secondary market.

3. What happens if I don’t declare these exempt investments?

Although there is no tax to pay, the omission characterizes “omission of goods” or “omission of income”. This creates inconsistency in the evolution of assets. If the taxpayer buys an asset (such as a car or property) using resources from these undeclared investments, the IRS will not be able to trace the origin of the money, which can lead to fines being imposed and fines being imposed for non-compliance with an ancillary obligation.

4. How to declare debentures that are not incentivized?

Common debentures are not exempt. They must be declared in “Assets and Rights” (Group 04, Code 04), but their income is taxed exclusively at source and must be reported in the “Income Subject to Exclusive/Definitive Taxation” form, code 06.

The correct allocation of information about assets exempt from Income Tax 2026 is essential for the investor’s fiscal consistency. The data crossing carried out by the Federal Revenue systems has reached high levels of sophistication, making transparency not only a legal obligation, but an asset protection tool. Make sure you have all official income reports at hand and, in the case of complex or voluminous portfolios, validation by an accounting professional is recommended to mitigate the risk of fines.

Disclaimer: This content is for informational and educational purposes only. It does not constitute accounting advice or investment recommendations. Tax rules may change. Always consult a qualified accountant or official IRS guidelines.