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How To Save On Taxes in Singapore

Tax season is almost upon us. This yearly event might be a new and strange event for those of us who are relatively new to the workforce, but for many Singaporeans, it’s something that most people have reached “autopilot” mode with.

However, what many people may or may not realise is that there are active ways that you can save on your taxes, which mainly revolve around tax deductions. A tax deduction basically reduces the amount of income you need to pay taxes on, and there are actually many deductions you can benefit from. Here’s a simple example:

So if you’ve been working for a few years and want to plan ahead, not just for this year but in the future as well, here are some key areas that you can save on taxes in Singapore:


1. Donations

This is probably the area that Singaporeans are most familiar with when it comes to tax deductions. If you make a cash donation to an approved Institution of a Public Character (IPC) or the Singapore Government for causes that are beneficial to the local community are tax-deductible.

How much can you get back? The Government has extended the tax deduction of qualifying donations to 250% till December 2021 (as announced at Budget 2018), and these deductions will be automatically reflected in your tax assessment.

It’s important to note, though, that not all registered charities are approved IPCs, so make sure you check out the Charity Portal first. Other types of donations that are tax-deductible include:

  • Shares Donations
  • Computer Donations
  • Artefact Donations
  • Public Art Tax Incentive Scheme
  • Land and Building Donations

You can read more about the terms and conditions for each donation on IRAS’ Donations page.


2. Rental Expenses

While you are taxed for rental income that is generated from your property, as well as related payments you may receive such as money for maintenance, furniture and fittings, you can actually get tax deductions for expenses that are incurred in order to generate that rental income.

Some of the expenses that qualify are costs like repairs and maintenance done to restore and keep the property in its original state. You can even get tax deductions for the property tax you pay on your property, as well as on the interest paid for your mortgage of that property. You can check out the full list of allowable expenses here.

For the ease of tax filing and because not all of us meticulously keep every single receipt for expenses incurred to generate that rental income, an arbitrary amount of deemed expenses that is calculated based on 15% of the gross rent per year will be reflected and pre-filled on the online tax form. You can still claim mortgage interest for the loan taken on top of this.

However, if you really are the sort to keep everything neatly sorted and filed away, you can still opt to claim the amount of actual rental expenses incurred. Just note that you have to keep all supporting documents for at least 5 years for verification purposes so… it’s really up to you whether you can be bothered or not.


3. Taking Care of Your Parents

Even though this might be something you believe to be your civil duty, you can still get some tax deductions for taking care of your parents, grandparents or in-laws. There are quite a few conditions for this, so do take note of the requirements:

  1. The dependent was living in Singapore in 2017
  2. The dependant was 55 years of age or above in 2017. If not, he/she must have been physically or mentally disabled.
  3. The dependant was living in your household. If the dependant lived in a separate household in Singapore in 2017, you must have incurred $2,000 or more in supporting him/her in that year. You will just need to declare how much and what you spent that money on, and IRAS will ask you for proof if necessary. This expenditure usually revolves around things like housing, food and other living expenses.
  4. The dependant did not have an annual income exceeding $4,000 in 2017. This income threshold is not applicable for handicapped dependants.

This deduction on your taxable income is applicable for up to two dependents so if you have claimed relief for both your parents, you can’t use it for your in-laws, as an example. Here’s a breakdown of how much you can claim:


Parent Relief

income tax parent relief


Handicapped Parent Relief

Handicapped parent relief 


4. CPF Cash Top Up

We have spoken before about why topping up your CPF, especially at the start of the year, might be a good thing, and if you’ve made voluntary cash top-ups to your own CPF Special Account (if you’re under 55) or Retirement Account (if you’re over 55), or you top up your parents’, grandparents’ or spouse’s CPF Special or Retirement Accounts in accordance with the CPF Retirement Sum Topping-Up Scheme, you get to claim up to $7,000 of tax deductions on your taxable income according to how much cash you’ve injected into the CPF system.


How to claim tax deductions

Claiming your tax deductions is easier than it sounds. When you do your IRAS e-filing, just access the “Total Deductions and Reliefs” section, where you can simply enter the form of relief you wish to apply for and fill in the details. The system will then automatically apply the tax deduction to your final amount.

For tax deduction in certain categories such as donations, you won’t have to lift a finger as the system will have logged the deduction amount you’re entitled to ahead of time.

For a full list of all the possible deductions for individuals, you can head on over to IRAS’s website which will give you details on what’s allowed and how you can claim the respective deductions.

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