Personal Income Tax Reliefs Schemes in Singapore

Special Tax Schemes

To promote a few social objectives, tax reliefs and rebates are offered to recognise individual effort. Objectives like family formation, upgrading work skills, saving for retirement, or looking after your parents are encouraged. You can claim reliefs and rebates based on the social objectives the government wants to promote. Deductions on the other hand are given based on expenses you incur in the process of generating income.

Are you a working mother? Do you want to upgrade your work skills? Or are you looking after a handicapped spouse, sibling, or child? Take a look at a few ways you can benefit from some of the tax reliefs and rebates that could be applicable to you.

1. CPF/Provident Fund Relief for Employees

When you save for your retirement, you can benefit from tax relief with the mandatory contributions you have to make to your CPF account. You also can contribute to an approved pension or provident fund. Both citizens and permanent residents may be eligible for CPF relief.

Contributions that Won’t Qualify for CPF Relief:
  • If you contribute more than the stipulated mandatory contributions based on the CPF Act.
  • When you are employed by more than one employer and your CPF contributions exceed the CPF cap on wages.
  • CPF contributions done while you are employed overseas.

2. CPF/Provident Fund Relief

for Self-employed and Salaried Persons Who Also Are Self-employed: When you are self-employed but are also working for a company, you may reduce your tax payable by contributing to your CPF account. As a self-employed individual, you can claim tax relief only if you have net trade income that is assessable.

Compulsory and Voluntary Medisave Contribution: As a self-employed person, when you receive a Notice of Computation or NOC from IRAS for CPF contributions, you have to make mandatory Medisave contributions. You can reduce the tax you pay by making voluntary contributions to Medisave in addition to your mandatory contribution.

3. CPF Cash Top-Up Relief

Topping up your CPF special account or retirement account or accounts of members of your family will help you get tax relief. You can opt for this if you are either a permanent resident or a citizen. You must possess an NRIC card to qualify for CPF cash top-up relief.

4. Course Fees Relief

If you take up a course to enhance your skills or increase your employability, course fees relief will help you save on tax. The course you sign up for should offer a recognised professional or academic qualification, or a vocational qualification that is approved.

5. Life Insurance Relief

Paying annually for premiums of your life insurance policy may help you claim relief from tax. For instance, if you are a married man, you may be able to claim tax relief for premiums you pay on your wife’s policy.

6. Supplementary Retirement Scheme (SRS) Relief

With this voluntary scheme you may be eligible for further relief from tax. You can save for your retirement by contributing to SRS. This is in addition to your CPF contributions.

7. Earned Income Relief

If you are gainfully employed in a profession, trade, business or vocation, you will receive earned income relief. Earned income is taxable income from employment, trade, pension, business, or profession minus allowable expenses.

For People with Mental or Physical Handicaps: If you have a permanent mental or physical disability, you will be eligible for greater relief if your disability severely affects your performance at work.

8. Parent/Handicapped Parent Relief

If you look after your parents, grandparents or your spouse’s parents or grandparents in Singapore, you can get tax relief subject to conditions. In the event your dependents are handicapped, you can claim either handicapped parent relief or parent relief on the same dependant.

9. Handicapped Brother/Sister Relief

If you or your spouse have siblings who are handicapped you may claim benefits of tax relief. For you to qualify, your sibling or spouse’s sibling should have lived in the same household with you during the assessment year. Or you should have incurred an expense of S$2,000 or greater while supporting them during the same year.

10. Spouse/Handicapped Spouse Relief

You can claim spouse relief if you supported your spouse in the previous financial year and their annual income was not more than S$4,000. If your spouse is handicapped, the limit of S$4,000 does not apply.
In the case of legally separated spouses, you can claim relief if a court order requires you to pay maintenance to your spouse. However, if you are divorced and are paying alimony, you won’t be able to claim relief.

11. Grandparent Caregiver Relief

If you seek help from your parents or grandparents or your spouse’s parents or grandparents to look after your children, you can claim tax relief. You can claim this if you are a working mother, but you won’t be able to claim this as a male taxpayer.

12. Qualifying Child Relief/Handicapped Child Relief

You can claim tax relief if you have a child who is handicapped or a child who is dependent. Your dependent child should either be 16 years old or below or pursuing full-time education. You can claim relief for a legally adopted child, step child, or your biological child (of yours and your spouse/ex-spouse). The relief amount will be higher if you have a child that is mentally or physically handicapped.

13. Working Mother’s Child Relief

If you are a working mother, you can claim up to 25% relief (depending on the number of children) of your earned income. You won’t be eligible if you are single or a male taxpayer.

14. NSman Relief (Self, Wife and Parent)

You are entitled to tax relief if you are an eligible National Serviceman who is operation ready. You can claim relief based on service done for the previous year. You won’t be able to claim this relief if you have committed a criminal or disciplinary offence.

15. Foreign Maid Levy Relief

If you are a married, divorced or widowed woman, you can claim foreign maid levy relief (FML) if you are working and have school going children. You can claim this if you engage the services of a domestic worker from overseas. You cannot claim this relief if you are a married man or a single person.

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16. Parenthood Tax Rebate

To encourage you to have more children, the government offers parenthood tax rebate. You may be eligible if you are a tax resident of Singapore who is married, widowed or divorced. You can claim a rebate up to S$20,000 per child.

17. Personal Tax Rebate (YA 2017)

You can get personal tax rebate if you are a citizen, a permanent resident, or a foreigner who has worked in Singapore for at least 183 days. You will get a rebate of up to 20% of your tax payable, but will be limited to S$500.

How Much Can You Save Through Tax Reliefs?

For the assessment year 2018 onwards, a new cap on tax reliefs was introduced. This limits the amount of tax relief you can claim to S$80,000. You may or may not be affected by this based on your income or type of relief you have chosen.
Tax reliefs are given to recognise your efforts. The government offers various reliefs and rebates to promote social objectives that are in line with what it believes. This can be in the form of support you provide your parents, children, improving your job skills, or even contributing to your own retirement.

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