Income tax paid by an individual is what helps the government to make the required improvements in the country and also helps in the running of society. If you are a permanent resident, a Singapore citizen or even a foreigner who has worked in Singapore for a period of 60 days or more in a specific year, you will have to make contributions to the income tax. The personal income tax in Singapore is considered to be progressive, means you contribute in accordance to your earnings. If you are considered to be in the ‘high’ bracket of income, the maximum income tax to be paid can go up to nearly 22%. What you need to look for is maximum tax relief, Singapore.
Claiming Tax Relief items:
You can apply for a number of rebates and tax reliefs if you are a citizen of Singapore and are able to meet the specific criteria.
*NSman Relief: (Wife, Parent or Self)
On the completion of national Service or even if you have been able to perform any NS activity during that specific year, your personal self, spouse or even parents are eligible for different reliefs.
*Handicapped Parent/parent relief:
This relief can be claimed only if you have support dependents like grand-parents, parents, grand-parents in-laws or parents-in-laws. You need to ensure that you meet the specified criteria.
*Life insurance Relief:
This relief is applicable on the premiums paid for your personal life insurance or even the one bought for your wife. This works out only if the total contribution to the CPF for that particular year does not cross $5,000.
*Earned Income Relief:
You can claim relief for the income earned in a specific year only if you have managed to keep the records. This does not include transportation or entertainment expenses. The maximum tax relief, Singapore works out from $1,000 to $8,000 depending on the age of the claimant. For those suffering from severe disability which is physical or even mental, the range is from $4,000 to $12,000.
*Foreign Maid Levy Relief:
This relief is specifically for women who have hired a maid, who is considered a foreigner. This is immaterial whether you are divorced, widowed or even married. You are able to claim twice the amount paid to the domestic help the previous year.
You can claim tax relief for any expenses made on rental property. Some of the claims can be of the interest paid on any housing loan, repair work done, premiums paid on the fire insurance or even repairs carried out for the restoration of the place.
*Course Fee Relief:
Attending a seminar or even taking a course for enhancing your profession allows you to claim the fees. This can be anywhere up to $5,500/.
Claim Business Expenses:
Maximum tax relief, Singapore is also possible with claiming business expense. Tax relief can be claimed for all the expenses which are incurred while running your own business and even for generating the required income. This can also be for setting up your own website or transportation. You need to be aware that this claim can be passed only if you have the receipts and documents which are relevant.
Donating to a Charity which is tax-deductible:
Donations made in cash to Institutions of Public Character (IPC’s) which have been approved can also work out well for maximum tax relief, Singapore. The government is deciding on increasing the tax-deductions to nearly 250% to encourage civic-mindedness.
Top-up CPF Voluntarily:
As known, every dollar put in the CPF is eligible for tax-relief. You have the option of making voluntary contributions besides the mandatory ones for maximum tax relief, Singapore. You need to ensure that this contribution is made in accordance to the specified limit. You have the freedom to make the contributions in all the three accounts, Medisave account, Ordinary Account and the Special Account.
The money in the Ordinary account can be used for the purpose of investment under the investment scheme of the CPF.
Contributing to the Supplementary Retirement Scheme (SRS):
The SRS is a voluntary scheme which has been created specifically for addressing the many needs of retirement for those residing in Singapore. The scheme is tax-deductible and thus beneficial to those looking for maximum tax relief, Singapore. All the contribution made to this SRS can be used for the purpose of investment. All these gains are tax-free. You need to be aware that on withdrawal at the time of retirement only 50% will b charged as tax.
You can open a SRS account with OCBC, UOB or even DBS.
Personal Income tax for Residents of Singapore:
There are different rates of tax applicable to non-residents and permanent residents of Singapore. You are considered as a tax resident for a specific year of assessment if
*you are a Singaporean
*A Permanent Resident
*A foreigner who has worked in Singapore for 183 days or more in that specific yar.
Difference in taxes:
A resident of Singapore is taxed in a progressive manner, while a non-resident is taxed at either 15% or the progressive rate which can work out to nearly 22%. For the residents you have double tax reliefs available. You also have reliefs for a number of taxes like child, dependents and more. The residents are exempted from income of interest but taxed for employment income. You can also get tax rebates.
The non-residents are not offered any double tax reliefs or even other types of reliefs. The employment income from any local employment is exempted from taxes but this employment needs to be of less than 60 days.
You need to file income tax returns if you are a resident/Entrepass holder/Employment pass/PEP or even if your annual income is more than $22,000 in Singapore. You will be also filing the income tax returns if you are sent a letter from the Inland Revenue Authority, Singapore.
The IRAS (Inland Revenue Authority of Singapore) provides a specific formula for the determination of the taxable income.