Taxes are not evil. As humans, our progress, survival, and even wellbeing depend on benefiting from and contributing to a group. And in a sense, taxes are the “membership fee” to belonging to this kind of organised society, where a government is put in charge of certain civil aspects of society that cannot be entrusted to the private sector, such as utilities, healthcare, education, environmental protection, security, and defense. But with any group, some members are tasked with contributing more while others are bigger recipients, yet at any time, these tables can be turned. This article attempts to simplify the various tax reliefs available for individuals, many of which are put in place to benefit families and the “sandwich generation”.

Government Personal Income Tax Relief:

Relief for Families

www.iras.gov.sg

Policy & How to QualifyBenefits & Limits
Earned Income Relief / Handicapped Earned Income Relief - For anyone with taxable income from employment, pensions, or a trade, business, profession or vocation. .• Tax relief of up to $8,000, depending on the age of the earner
• Tax relief of up to $12,000, depending on the age of the handicapped earner
Parent Relief / Handicapped Parent Relief - For persons supporting their parents, grandparents, parents-in-law or grand-parents-in-law. Claimants can share relief based on an agreed apportionment.


• Tax relief of either $5,500 or $9,000
• Tax relief of either $10,000 or $14,000, if dependent is handicapped
Handicapped Sibling Relief - For persons who lived in the same household as a handicapped sibling or sibling-in-law, or incurred ≥$2,000 in supporting him/her.• Tax relief of $5,500 for each handicapped sibling / sibling-in-law
Spouse Relief - For persons supporting their spouse. • Tax relief of $2,000, if spouse has annual income ≤$4,000
• Tax relief of $5,500, if your spouse is handicapped
Parenthood Tax Rebate - For all married, divorced or widowed parents. • Tax rebates between $5,000 and $20,000, depending on the birth order of the child
Qualifying Child / Handicapped Child Relief (QCR/HCR) - For persons supporting a child <16 years old or full-time student, with annual income ≤$4,000. Spouses can share QCR/ HCR relief based on an agreed apportionment.• Tax relief of $4,000 per child
• Tax relief of $7,500 per handicapped child
Working Mother’s Child Relief (WMCR) - For working mothers. These two policies, WMCR plus QCR/ HCR, are capped at $50,000 per child
• tax relief of between 15% to 25% of earned income per child (additive for >1 child), depending on the birth order of the child
Grandparent Caregiver Relief - For working mothers who engage the help of their parents and grandparents to take care of their children.• Tax relief up to $3,000
Foreign Maid Levy Relief - For working mothers with school-aged children.
• Tax relief for foreign domestic worker levy paid (for one maid)

Relief to Encourage Savings

www.iras.gov.sg

Policy & How to QualifyBenefits & Limits
Self-employed CPF Contributions - All CPF contributions get tax relief, including CPF contributions from a self-employed person.
• Up to 37% of income from trade, business, profession or vocation, subject to a cap of $37740 (YA 2017)
Voluntary Medisave Contributions - For both employees and self-employed persons who make contributions to their Medisave Account. • Subject to a cap which is the lesser of (1) the applicable Basic Healthcare Sum, less balance in Medisave Account before the voluntary cash contribution, or (2) a cap of $37740 less mandatory CPF contributions
CPF Cash Top-Up Relief under the CPF Retirement Sum Topping-Up Scheme - For individuals who made contributions to their Special Account (recipients < age 55) or Retirement Account (recipients ≥age 55), or who made top-ups for their spouse or siblings who had an annual income ≤$4,000.• Maximum relief of $7,000 for self
• Maximum relief of $7,000 for family members
Life Insurance Relief - For persons who paid life insurance premiums on his/her own policy or on your wife's life, AND have CPF contribution or self-employed Medisave/Voluntary CPF contribution <$5,000.• Can claim the lesser of (1) the difference between $5,000 and your CPF contribution or (2) up to 7% of the insured value of the lesser of your own/your wife's life or the amount of insurance premiums paid
Supplementary Retirement Scheme (SRS) Relief - For contributions to a SRS account.• Relief amount is the actual amount of SRS contribution made by you and/or your employer per YA

Relief for Self-Improvement, Civic-Mindedness & Public Service

www.iras.gov.sg

Policy & How to QualifyBenefits & Limits
Relief for NSmen - For National Servicemen and NS Key Appointment Holders.• Tax relief of $3000 for Active NSmen
• Tax relief of $1500 for Inactive NSmen
• An additional relief of $2000 for Key Appointment Holders
Relief for Wives / Parents of NSmen - For the wives and parents of NSmen. • Tax relief of $750
Course Fees Relief - For persons who attend any course, seminar or conference that leads to an approved academic, professional or vocation qualification; or is relevant to their current employment, trade, business, profession or vocation.• Tax relief of the actual course fees incurred, up to a maximum of $5,500 each year
Donations - Includes cash donations, shares donations, and certain donations in kind (computer, artefact, public art, land, and buildings)• Claim tax deduction of 3 times the amount of donations

 

Look out for future simplified articles which will focus on other Government Policies, including Housing, Social Safety Nets, and Family Benefits. 🙂

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