Navigating Singapore’s tax system can be complex, with a range of tax reliefs that can significantly reduce your taxable income. While some reliefs are automatically granted by IRAS (Inland Revenue Authority of Singapore), others require you to actively claim them during tax filing. Unfortunately, many taxpayers miss out on these savings simply because they are not aware of the reliefs or the conditions attached to them. This is where professional tax planning services can make a difference. In this guide, we will highlight 10 frequently overlooked tax reliefs that could save you a substantial amount if claimed correctly.
What is Tax Relief?
Tax reliefs are deductions that reduce your taxable income, leading to lower taxes. These incentives are offered by the government to reward or encourage certain behaviours, like supporting family members, pursuing education, or planning for retirement. However, not all reliefs are automatic—some require a manual claim, which makes them easy to miss if you are not aware of their existence.
1. Parent Relief / Handicapped Parent Relief
If you are financially supporting your parents, grandparents, or great-grandparents, you can claim Parent Relief or Handicapped Parent Relief. This relief can be claimed whether or not you live with them, but the amount varies based on your living arrangement and whether the dependent has a disability.
Claim Amount: Up to $9,000 if living together ($14,000 if handicapped).
2. Child Reliefs (Qualifying Child Relief / Handicapped Child Relief)
Parents can claim relief for each child who is unmarried and under 16 years old or still pursuing an education. The relief is increased if the child has a disability, but it must be manually claimed.
Claim Amount: $4,000 per child for Qualifying Child Relief, $7,500 per child for Handicapped Child Relief.
3. Life Insurance Relief
If your mandatory CPF contributions are less than $5,000, you can claim tax relief on life insurance premiums paid. This relief is only applicable if the insurance covers you or your wife and has a minimum coverage period of 10 years.
Claim Amount: Up to $5,000, minus CPF contributions.
4. Course Fees Relief
Did you take a course or attend a seminar related to your job or future employment opportunities? The Course Fees Relief can help you recover some of the costs. It’s available for courses that lead to academic, professional, or vocational qualifications, but it requires you to keep receipts and manually claim the relief.
Claim Amount: Up to $5,500.
5. Working Mother’s Child Relief (WMCR)
This relief is targeted at working mothers to support them in balancing work and family life. The relief is a percentage of the mother’s earned income and increases with the number of children.
Claim Amount: 15% to 25% of earned income, depending on the number of children.
6. Foreign Maid Levy Relief
If you’re a married woman, divorcee, or widow with school-going children, you might be eligible for the Foreign Maid Levy Relief. This relief allows you to claim twice the annual levy paid for a domestic worker, but you need to remember to include it in your tax return.
Claim Amount: Twice the annual levy paid.
7. CPF Cash Top-Up Relief
Voluntary cash top-ups to your own CPF Special Account or to the Special/Retirement Accounts of your family members can be claimed as relief. This is an effective way to save for retirement while reducing your tax bill, but the relief must be manually claimed.
Claim Amount: Up to $8,000 for yourself and an additional $8,000 for family members.
8. Supplementary Retirement Scheme (SRS) Relief
The SRS is a voluntary scheme to encourage retirement savings, offering tax benefits for contributions. You need to make a manual claim for the contributions made to your SRS account each year, which makes it easy to overlook if you aren’t proactive about your tax planning.
Claim Amount: Up to $15,300 for Singapore citizens and PRs, $35,700 for foreigners.
9. Handicapped Brother / Sister Relief
If you support a handicapped sibling or sibling-in-law who resides in Singapore, you can claim relief. Proof of support is required, and the relief must be manually declared.
Claim Amount: $5,500 per handicapped sibling or sibling-in-law.
10. NSmen Self, Wife, and Parent Relief (Enhanced Claim)
While basic relief for National Service (NS) obligations is automatically granted, you can claim additional relief manually if you have performed NS duties during the year. There’s also a specific relief for wives and parents of NSmen, which needs to be manually applied for.
Claim Amount: Up to $5,000 for self, $750 each for wife/parent.
Don’t Miss Out on These Savings
Claiming tax reliefs can be challenging, but the potential savings make it worthwhile. Many reliefs require proactive effort and awareness of eligibility, making them easy to miss. By planning ahead, you can fully benefit from Singapore’s tax incentives and keep more of your income.
At Watershore, a trusted tax return service company, we emphasize the importance of preparation. With expert guidance, you can confidently navigate tax reliefs that benefit individuals and families.
Want to maximize your tax savings? Contact Watershore’s tax planning experts for a personalized consultation. We’ll help you identify eligible reliefs and ensure you claim every deduction you deserve.