Who doesn’t dream of reducing their personal income tax in Singapore? Singapore has a variety of different tax relief initiatives that you can leverage to save some money. We have put together a list of 7 different ways you can reduce your income tax.
How reducing your Singapore income tax works
Singapore’s income tax system is progressive, which means that the more you earn, the more you will be taxed. The idea is to find things you can either write-off or claim tax relief for. While there are various ways to do that, there is also a personal income tax relief cap. This limit is currently set at S$80,000 and is the total amount of your tax relief for any given year of assessment.
Make a charitable donation
We love this point, as it really incentivises people to do good. In order to get tax relief, you just have to make a donation to any charity that is registered as an IPC (Institute of a Public Character) in Singapore. You can get up to 250% in tax deductions based on the donated amount.
Top up your CPF
This is another great way to help yourself – give yourself money and pay less taxes. Sounds great? Here’s how it goes. Simply top up your CPF Special Account. Once done, it will be automatically deducted and you don’t have to worry about it. However, there is a limit. This means that only your chargeable income of up to S$7,000 will be considered. But it’s not the end just yet. You can also top up your parents’ CPF accounts as well and receive another tax relief for that.
