Glossary
NISA
Japan's tax-free investment account. Gains and dividends inside the annual and lifetime quota are exempt from the usual ~20% tax, which is why low-turnover index holding inside NISA is hard to beat after tax.
In plain terms
The 2024 revision made NISA permanent, with a ¥3.6M annual quota (¥1.2M tsumitate + ¥2.4M growth) and an ¥18M lifetime cap. Selling frees the quota again the following year, but the tax exemption only ever applies to money inside the account.
NISA matters to this project because it changes the bar an active strategy must clear: a taxable strategy gives up roughly a fifth of every realised gain, while the index sitting inside NISA gives up nothing. Our verdict pages use the tax-free index as the benchmark precisely because it is the default any Japanese retail investor can actually hold.
Related terms
Educational definitions only. Not investment advice.