Year 2019 is coming to an end and in this article we will like to look into ways to reduce income tax. This is a happy problem to have which means that you are drawing a high salary. Do note that the total amount of personal reliefs an individual can claim is up to S$80,000 per Financial Year.
Voluntary CPF Special Account Top-up
There is a maximum $7,000 cash top-up to your Special Account which you can enjoy $7,000 in tax relief.
Voluntary CPF contribution to Retirement Account
There is up to $7,000 tax relief for top-up for your siblings, spouse, parents and grand parents.
Voluntary Medisave Top-up
You may claim tax relief for your voluntary Medisave contributions if:
- You are a Singapore Citizen or Permanent Resident;
- You have made voluntary contributions to your Medisave account in the previous year; and
- You derived any source of income (e.g. from rental, director’s fees, etc.) in the year you made the voluntary contributions.
Contribute to Registered Tax Deductible Charity
A donation made to a Registered Tax Deductible Charity organisation would allow tax relief up to 250% for another three years till 31 December 2021. It can be in cash donations, shares donations, computer donations, artefact donations , donations under public art tax incentive scheme, land and building donations.
Course Fees Relief
Course Fees Relief is given to encourage individual to upgrade their skills and enhance employability. It needs to be course, seminar or conference which leads to an approved academic, professional professional or vocation qualification. Course Fees Relief can up to maximum S$5,500 each year.
Deduction from Rental Expenses
Rental Expenses can be claimed as tax deduction. The allowable expenses for housing loans are interest paid on the loan. The allowable expenses for property tax is based on property tax paid for in the year. Premiums paid on fire insurance can be claimable. Maintenance, costs of securing tenant, replacement of furniture, internet charges not paid by tenant, utility expenses and expenses incurred on properties that are not generating rental income.
Supplementary Retirement Scheme
Tax relief for SRS can be up to S$15,300 for Singaporeans and S$35,700 for Foreigners.
I have top up my mother’s Retirement Account by S$3,500 and my wife has top up my mother’s Retirement Account by S$7,000. We have top up her Special Account by S$7,000. In addition, we have top up S$15,300. This is to maximize her tax relief. In the next article (you can read here), we need to explore what we can do with her SRS account.