Tax Savings At A Glance

Tax Savings At A Glance

Are you eligible for tax reliefs?

In the light of this Covid-19 situation, learn how you can lower your 2020 income tax bill by making use of tax reliefs and deductions to enhance your cash flow. In collaboration with the Inland Revenue Authority of Singapore, here are some common tax reliefs.

GENERAL RELIEFS - FOR ALL TAXPAYERS

Earned Income Relief
For individuals who are gainfully employed
or are carrying on a trade, business, profession or vocation 

 
 

Parent/Handicapped Parent Relief
Given to individuals who supported their parents, grandparents, parents-in-law and grandparents-in-law in 2019

 

Handicapped Brother/Sister Relief
Given to individuals who supported their handicapped siblings or siblings-in-law in 2019

 

CPF Relief
For employees and the self-employed made qualifying contributions to their and Medisave accounts in 2019

 

Life Insurance Relief
For individuals who paid insurance premiums in 2019 on their own life insurance policy

 

Supplementary Retirement Scheme (SRS)
For individuals who made SRS contributions in 2019

 

CPF Cash Top-Up Relief
For individuals who topped up their CPF Special/Retirement Account or those of their family members in 2019

 

Course Fees Relief
For individuals who attended approved courses, seminars or conferences in 2019

 

NSman Relief
Given to all eligible operationally-ready National Servicemen (NSmen)


ADDITIONAL RELIEFS

FOR MARRIED/ DIVORCED/WIDOWED TAXPAYERS

MALE AND FEMALE TAXPAYERS

FEMALE TAXPAYERS

 Spouse Relief /

Handicapped Spouse Relief
Given to individuals who supported their spouse in 2019

 

Working Mother's Child Relief (WMCR)

Given to working mothers who had taxable earned income and maintained a child in 2019

 

 

Qualifying Child Relief (QCR)/Handicapped Child Relief (HCR)

Given to parents who are raising and/or maintaining children

 

 

Grandparent Caregiver Relief
For working mothers who engage the help of their parents/ grandparents (including in-laws) to take care of their children

 

 

NSman Parent Relief

Given to parents of eligible operationally-ready National Servicemen

 

Foreign Maid Levy Relief
For married women (including divorcees widows with children eligible for child relief) who had taxable earned income and employed a foreign domestic worker in 2019

 

 

 

NSman Wife Relief

Given to wives of eligible operationally-ready National Servicemen

 

 


AVAILABLE DEDUCTIONS

  • Deductions on Employment Expenses
Claim deductions on employment expenses incurred while carrying out official duties which were not reimbursed by your employer
  • Deductions on Business Expenses

For the self-employed, claim deductions on allowable business expenses incurred in the course of carrying on a trade

  • Deductions on Rental Expenses

Claim tax deduction on actual expenses incurred or 15% deemed rental expenses in producing the rental income on your property

  • Deductions on Donations

Tax deductions of 2.5 times the amount of donations made in 2019

PARENTHOOD TAX REBATE (PTR)

Given to eligible parents as credit to offset the income tax payable. PTR can be shared with your spouse based on an agreed apportionment. Any unutilised balance will automatically be carried forward to offset your and your spouse’s future income tax payable.

Which tax reliefs are you eligible for?

For individuals and families, here’s a quick look at the key reliefs in Singapore that will help to boost savings on your final tax bill for Year of Assessment (YA) 2020. Doing so will help to enhance your cashflows, particularly during this challenging period of Covid-19 outbreak. In collaboration with the Inland Revenue Authority of Singapore, we highlight two worked examples.

For Individuals

Lisa is supporting her handicapped father and her mother who is a housewife, even though her mother is not living with her. She also topped up $4,200 and $4,500 to her grandmother’s and grandfather’s CPF accounts in 2019. In 2019, she attended an $8,800 course relating to her profession that she self-funded.

Lisa is a Singaporean and earned $70,000 in 2019.

Personal Tax Reliefs applicable to Lisa

-       Earned Income Relief

$1,000     (auto-included)

-       Handicapped Parent Relief
(for father)

$14,000

-       Parent Relief (for mother)

$5,500

-       CPF Relief

$14,000

-       CPF Cash Top Up Relief

$7,000    (auto-included, and capped at max $7k)

-       Course Fee Relief

$5,500 (capped at max of $5.500)

Total Reliefs

$47,000

Total Chargeable Income

$23,000         ($70,000 - $47,000)

Tax Payable on Chargeable Income

Tax on the first $20,000

$0

Tax on the remaining $3,000
(income tax rate of 2%)

$60

Lisa’s Net Tax Payable for Year of Assessment 2020

$60


How it works out

Lisa can claim Parent Relief ($14,000) on her handicapped father. Though her mother is not living with her, she can claim Parent Relief ($5,500) on her mother if she incurred $2,000 or more in supporting her in 2019.

As Lisa made cash CPF top-ups for her grandparents in 2019, she can claim CPF Cash Top Up Relief capped at a maximum of $7,000.

In addition, she will be able to claim the maximum Course Fees Relief of $5,500.


For Families

Mr and Mrs Tan both work full time. They live with Mr Tan’s parents and had their second child in 2019. In the day, Mr Tan’s parents look after the children with the help of a foreign maid. Mrs Tan also contributed $5,000 to the Supplementary Retirement Scheme (SRS) in 2019.

Mrs Tan is a Singaporean and earned $125,000 in 2019.

Personal Tax Reliefs applicable to Mrs Tan

-       Earned Income Relief

$1,000     (auto-included)

-       Qualifying Child Relief

$2,000

-       CPF Relief

$20,400

-       NSman Relief (for wife)

$750     (auto-included)

-       Working Mother’s Child Relief
(1st child)

$18,750         (15% x $125,000) 

-       Working Mother’s Child Relief
(2nd child)

$25,000         (20% x $125,000)

-       Foreign Maid Levy

$1,440

-       Grandparent Caregiver Relief

$3,000

-       Supplementary Retirement Scheme (SRS) Relief

$5,000

Total Reliefs

$77,340

Total Chargeable Income

$47,660    ($125,000 - $77,340)

Tax Payable on Chargeable Income

Tax on the first $40,000

$550

Tax on the remaining $7,660
(income tax rate of 7%)

$536.20

Mrs Tan’s Net Tax Payable for Year of Assessment 2020

$1,086.20


How it works out

As her children are below 16 years of age, she can claim Qualifying Child Relief (QCR) of $4,000 per child. Mrs Tan decides to share this relief with her husband at an agreed apportionment of 1:3 and makes a claim of $2,000.

In addition, she can claim Working Mother’s Child Relief calculated based on 15% and 20% of her earned income for her first and second child respectively.

She also enjoys Foreign Maid Levy (FML) Relief of $1,440 ($60 x 12 months x 2 times), which is twice the total foreign domestic worker levy she paid in 2019.

As her children were below 12 years of age in 2019, she can claim Grandparent Caregiver Relief of $3,000.

Mrs Tan will also be entitled to a Supplementary Retirement Scheme (SRS) Relief of $5,000.

When claiming tax reliefs, do bear in mind that there is a total personal income tax relief cap of $80,000.

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