SRS Contribution Limit Keeps Scheme Simpler
10 Feb 2015Published on TODAY (10 Feb, Voices, Pg 20)
Ms Siew Kang Yoke (“More flexibility in Supplementary Retirement Scheme, please”, TODAY, 4 Feb 2015) asked if there can be flexibility to allow more deposits into the Supplementary Retirement Scheme (SRS) account beyond the annual contribution cap.
SRS contributions enjoy tax relief and only 50% of the monies in the SRS account are subject to tax upon withdrawal. If more monies beyond the contribution cap are put into the account, they could be subject to tax upon withdrawal. This may not be advantageous for account holders. It would also be administratively complex for agent banks and product providers to separately account for two different pools of SRS contributions with different tax status, and to attribute investment gains and losses between the two pools.
Hence, we have kept the scheme simpler for SRS accounts to accept only monies up to the annual contribution cap. It differs from CPF as withdrawals from the CPF are exempt from tax.
We thank Ms Siew for her feedback.
Lim Yuin Chien
Director
Corporate Communications
Ministry of Finance
Ms Siew Kang Yoke (“More flexibility in Supplementary Retirement Scheme, please”, TODAY, 4 Feb 2015) asked if there can be flexibility to allow more deposits into the Supplementary Retirement Scheme (SRS) account beyond the annual contribution cap.
SRS contributions enjoy tax relief and only 50% of the monies in the SRS account are subject to tax upon withdrawal. If more monies beyond the contribution cap are put into the account, they could be subject to tax upon withdrawal. This may not be advantageous for account holders. It would also be administratively complex for agent banks and product providers to separately account for two different pools of SRS contributions with different tax status, and to attribute investment gains and losses between the two pools.
Hence, we have kept the scheme simpler for SRS accounts to accept only monies up to the annual contribution cap. It differs from CPF as withdrawals from the CPF are exempt from tax.
We thank Ms Siew for her feedback.
Lim Yuin Chien
Director
Corporate Communications
Ministry of Finance