Personal Income Tax Reliefs and Rebates
The Government provides various tax reliefs and rebates to promote certain social objectives, such as encouraging marriage and family formation, recognition for taxpayers who support their dependants, and saving for retirement.
Please refer to IRAS’ website for more details.
Personal Income Tax Relef Cap
Over the years, the Government has introduced and enhanced reliefs significantly. Today, there are 15 tax reliefs. Each relief serves an objective. But, taken together, the reliefs can unduly reduce the taxable income.
This year’s Budget saw the introduction of a $80,000 tax relief cap per Year of Assessment. Ninety-nine per cent of tax residents can claim their reliefs without being affected by the cap, including 9 out of 10 working mothers who claimed the Working Mothers’ Child Relief. The remaining one per cent of tax residents who are expected to be affected, can still enjoy tax reliefs, up to a cap of $80,000 per year of assessment.
The Government remains committed to supporting Singaporeans in fulfilling their marriage and parenthood aspirations. Over the years, the Government has added and significantly enhanced various schemes to support parents in having children. In total, for instance, parents of eligible children receive between $15,000 and $17,000 in the first 18 months of their child’s birth. This is in addition to tax reliefs and other leave benefits.
The tax relief cap is to keep our tax system progressive. Nonetheless, even with the cap, our tax burden remains competitive.
The tax relief cap does not apply to the tax deduction for donation. This deduction is not a personal income tax relief.