Definition:
Income Tax Relief in Singapore refers to deductions or exemptions provided by the government to reduce the taxable income of individuals. These reliefs are designed to encourage behaviors and support circumstances that contribute positively to the well-being of individuals and society. They are available to tax residents, including non-Singapore Citizens who have resided in Singapore for more than 183 days in a year.
Key Types of Income Tax Reliefs:
- Earned Income Relief: For individuals earning income through employment, trade, business, profession, or vocation.
- Spouse/Handicapped Spouse Relief: Acknowledges the financial support provided to spouses.
- Foreign Domestic Worker Levy Relief: Encourages married women to remain in the workforce by offering relief on the levy paid for foreign domestic workers.
- CPF Relief: For employees and self-employed individuals contributing to the Central Provident Fund (CPF), aimed at encouraging savings for retirement.
- NSman (Self, Wife, Parent) Relief: Recognizes the contributions of National Servicemen and the support provided by their families.
- Parent/Handicapped Parent Relief: Encourages support for parents, grandparents, parents-in-law, and grandparents-in-law residing in Singapore.
- Grandparent Caregiver Relief: For working mothers who engage the help of grandparents for childcare.
- Qualifying/Handicapped Child Relief and Working Mother’s Child Relief: Supports parents in their financial responsibilities towards their children.
- Handicapped Brother/Sister Relief: For individuals supporting siblings with disabilities.
Eligibility and Conditions:
Eligibility for each type of relief is subject to specific conditions, such as the taxpayer’s relationship to the dependent, the dependent’s residency status, and the taxpayer’s marital status. Taxpayers are advised to ensure they meet the eligibility requirements for the specific reliefs before applying.
Cap on Income Tax Relief:
To ensure fairness and balance in the tax system, there is a cap on the total amount of tax relief an individual can claim. The sum of all claimed reliefs is limited to a maximum of S$80,000 per year of assessment.