Tax Savings At A Glance (II)



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.

Lisa’s Income in 2019

$70,000

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.

Turned 55

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.

Mrs Tan’s Income in 2019

$125,000

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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