Act on Special Measures Concerning Taxation

With regard to the application of the provisions of Article 10 of the Income Tax Act to the deposits and savings, jointly managed trusts, specified bond-based investment trusts under public offering, or securities prescribed in paragraph (1) of that Article for which an individual who has a domicile in Japan and who is a person with a disability or other eligible person prescribed in Article 10, paragraph (1) of that Act (referred to in the following Article as a "person with a disability or other eligible person") makes a placement prescribed in that paragraph on or after January 1, 1994, the phrase "3,000,000 yen" in paragraph (7), item (i) of that Article is deemed to be replaced with "3,500,000 yen".

Where an individual who has a domicile in Japan and who is a person with a disability or other eligible person purchases, at a business office or other office of a financial instruments business operator or financial institution specified by Cabinet Order (hereinafter referred to in this paragraph as a "business office, etc. of a selling institution"), government bonds and local government bonds specified by Cabinet Order (hereinafter referred to in this paragraph and paragraph (3) as "public bonds"), if, pursuant to the provisions of Cabinet Order, the individual has submitted, at the time of the purchase, a document stating that the individual seeks the application of the provisions of this paragraph with regard to the public bonds, the individual's name, date of birth, and address, the fact that the individual falls under the category of a person with a disability or other eligible person, and other necessary matters (hereinafter referred to in this paragraph as an "application for special tax-exempt savings"), income tax is not imposed on the interest corresponding to each calculation period of interest on the public bonds, only if the following requirements are met throughout that calculation period (where the public bonds were purchased in the middle of the calculation period, for the calculation period that includes the day of purchase, throughout the period from that day to the last day of the calculation period):

the public bonds are managed by means of entries or records in a transfer account book prescribed in the Act on Book-Entry Transfer of Corporate Bonds and Shares (Act No. 75 of 2001) or any other method specified by Cabinet Order;

the total of the face value of the public bonds and the face value of other public bonds purchased at the business office, etc. of the selling institution by submitting an application for special tax-exempt savings does not exceed the maximum limitation listed in item (iii) of Article 10, paragraph (3) of the Income Tax Act as applied mutatis mutandis pursuant to the following paragraph that is stated in the statement of special tax-exempt savings prescribed in Article 10, paragraph (3) of that Act which the individual has submitted via the business office, etc. of the selling institution (where a statement of change to the maximum limitation for special tax-exempt savings prescribed in paragraph (4) of that Article as applied mutatis mutandis pursuant to the following paragraph has been submitted, on and after the day of submission, the maximum limitation after the change).

The provisions of Article 10, paragraphs (2) through (10) of the Income Tax Act apply mutatis mutandis in the case where the provisions of the preceding paragraph apply. In this case, the phrase "statement of tax-exempt savings" in paragraphs (2) through (7) and paragraph (10) of that Article is deemed to be replaced with "statement of special tax-exempt savings", the phrase "application for tax-exempt savings" in paragraph (2) and paragraph (10) of that Article is deemed to be replaced with "application for special tax-exempt savings", the phrase "paragraph (1)" in paragraph (3), paragraph (7), and paragraph (10) of that Article is deemed to be replaced with "Article 4, paragraph (1) of the Act on Special Measures Concerning Taxation", the phrase "statement of change to the maximum limitation for tax-exempt savings" in paragraphs (4) through (7) and paragraph (9) of that Article is deemed to be replaced with "statement of change to the maximum limitation for special tax-exempt savings", and the phrase "paragraph (1), paragraph (3), or" in paragraph (8) of that Article is deemed to be replaced with "Article 4, paragraph (1) or paragraph (3) of the Act on Special Measures Concerning Taxation, or".

With regard to the application of the provisions of the preceding two paragraphs to public bonds purchased on or after January 1, 1994 by an individual who has a domicile in Japan and who is a person with a disability or other eligible person, the phrase "3,000,000 yen" in Article 10, paragraph (7), item (i) of the Income Tax Act as applied mutatis mutandis pursuant to the preceding paragraph is deemed to be replaced with "3,500,000 yen".