The personal tax filing period is from 1st March to 15th April or 18th April for e-filing, during which you will be required to declare your earnings in the previous year to IRAS. Many employers have participated in the AIS (Auto-inclusion Scheme for employment income), therefore you will notice that your annual income is already reflected in IRAS tax portal when e-filing your tax. If your employer does not participate in the AIS, then you will have to manually input your annual income to the system.
Aside from declaring your income, many of us are most interested to know how to enjoy the tax rebates and reliefs available to us. This post will highlight the general tax reliefs that are available to all tax payers in YA 2016.
Course Fee Relief: You can claim up to a maximum of $5,500 on the fee you have paid in 2015 for courses, seminars, conferences or vocation qualification. The courses that you attended have to be relevant to your current trade or profession and not for leisure purpose.
CPF Cash Top-up Relief: If you have voluntarily contributed to your CPF Special account (age 55 and below) or retirement accounts (age 55 and above), you are eligible to enjoy a tax rebate of up to $7,000 based on the amount you have contributed. Additionally, if you have also contributed to your family members*, whose earning is less than $4000 a year, you can claim up to another $7, 000 based on the amount you have contributed too. Therefore, in total you can deduct up to a maximum of $14,000 for the CPF Cash Top-up Relief.
*Spouse and siblings.
Life Insurance Relief: This relief allows you to claim premium paid on your own life insurance policy on the condition that your annual CPF (employee) contribution is less than $5000.
The amount claimable is calculated in 3 scenarios, whichever is lower:
The difference between $5000 and your yearly CPF employee contribution amount;
7% of the insured value or;
The premium paid.
Parent Relief/Handicapped Parent Relief: If you have supported up to 2 of the following dependents; parents, grandparents, parents-in-law and/or grandparents-in-law, you can claim the shared amount of $9,000/dependent (staying in the same household) or $5, 500/dependent (not staying in the same household). The dependent must not have annual earnings of more than $4000.
For claiming on handicapped dependents, the total shared amount is $14,000/dependent (staying in the same household) or $10, 000/dependent (not staying in the same household).
Deductions on Employment Expenses: Expenses incurred by you during the production of employment income are claimable. Such expenses include travelling expense, entertainment expense for the purpose of entertaining the clients, expenses paid for professional updates or networking etc.
However, you will need to keep proper records of the claims for 5 years. The supporting documents have to reflect on the claim expenses, such as invoices, receipts, vouchers and other documents.
Parenthood Tax Relief (PTR): To encourage all married couples to have more children, the parenthood tax relief offers a tax rebate of $5, 000, $10, 000 and $20, 000 depending on the number of children the couple has. Child adoption is also eligible for the PTR.
1st Child = $5, 000 PTR
2nd Child = $10, 000 PTR
3rd Child = $20, 000 PTR
4th Child = $20, 000 PTR
5th and subsequent Child = $20, 000/child
You can share the PTR with your spouse base on an apportionment mutually agreed by both of you.
Other Tax relief which are automatically included are:
Earned Income Relief
CPF Contribution Relief
SRS (Supplementary Retirement Scheme) Relief
I hope this post will bring awareness to you on the available tax relief which you might not know of. So, do utilise the tax reliefs and rebates, and reduce your tax payable in this tax season.