Guidelines on Tax Relief Items in Tax Filing (2022)
It comes to the income tax filing season again. Everyone should have received notification from IRAS to complete the income tax filing on IRAS website from 1 March to 18 April. There are still many people not familiar with the declaration on tax relief items. Here we have an introduction on this topic. Since this article is popular, I update it every year to make sure the information is updated and accurate.
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To e-File our tax return, we have to go to IRAS website (www.iras.gov.sg) and log in with our SingPass. After logging in, we can see the row of FORM B or FORM B1 under Tax Filing Status section. Click the E-FILE button in the right of the row, we will see the Income, Deductions and Reliefs Statement (IDRS) page. This page displays all the items automatically filled up by the system, including employment income, CPF contribution, and some of the tax relief items declared last year. Most of the data automatically filled up by the system is correct. What we need to do is to click the EDIT MY TAX FORM button at the bottom of this page, to adjust some of the numbers according to the reality in the previous year. After clicking EDIT MY TAX FORM button, we will see My Tax Form. The first three sections are employment income, self-employed income and other income. In this article, our focus is the fourth section, which is Deductions, Reliefs and Parenthood Tax Rebate.
In this section, there is a category of items relevant to supporting or taking care of our family members. It includes Spouse / Handicapped Spouse, Child, Parent / Handicapped Parent, Handicapped Brother / Sister. To declare in this category, we can just simply follow the instruction of the system and fill in the personal information of the family member being supported. The tax relief amount in this category is generally fixed. And if we filled in an item in the previous year, it will be automatically copied to the form this year. Under the item of Child, if the child is a Singapore Citizen, the child’s working mother will enjoy more relief. To find out more about tax relief benefits for working mothers in Singapore, you can read my article here. The item of Parent/ Handicapped Parent includes grandparents besides parents. For new immigrants in Singapore, kindly take note that to enjoy relief under item Parent / Handicapped Parent and Handicapped Brother / Sister, the family member being supported has to be living in Singapore for long term.
Donations and Zakat Expenses refers to the tax relief from donation. In most of the cases, the donations which are allowed for tax relief are registered with Institution of a Public Character (IPC). IPC sends the donation data to IRAS directly. So this item will be automatically filled up by the system. Zakat Expenses is the donation for building mosques. It should be filled into the expenses under income sections instead of filing as donation.
Earned Income Relief is automatically filled up by the system.
CPF / Provident Fund and CPF Cash Top-up are both filled up by the system automatically according to our CPF contribution in the previous year. There is one exception: If you are employed, but your employer does not join the Auto-Inclusion Scheme, you have to manually fill in your CPF contribution amount due to employment under the CPF/ Provident Fund item.
Life Insurance refers to tax relief from life insurance premium. I had a brief introduction in my previous video on this topic. This item is filled up by ourselves. If we filled it up in the previous year, the same number will be copied to the form this year. While filling up this field, there are a few points to take note. At first, only life insurance premium is allowed for this relief. Accident or health insurance are not eligible. Many clients asked me whether critical illness insurance plan, endowment plan and investment-linked plan are eligible. IRAS does not have a clear definition here. But to play safe, we would better apply the strict definition of life insurance. In this case, if the critical illness benefit in critical illness insurance is an advancement of death benefit, the critical illness insurance can be considered as life insurance. If an endowment plan or investment-linked plan has significant fixed death benefit, or the insurance company categorise the plan under protection plan, this plan can be considered as life insurance. Secondly, the annual premium declared for life insurance can’t exceed 7% of the sum assured of the life insurance. Actually except for single premium life insurance, the annual premium for most life insurance does not exceed 7% of the sum assured. Thirdly, to utilise life insurance for tax relief, the CPF contribution of the tax payer can’t exceed $5,000 in the previous year. And the limit for life insurance tax relief is the difference between $5,000 and the CPF contribution in the previous year. This eligibility and tax relief limit will be taken care by the system.
Course Fees relief is filled up by ourselves. Its coverage is very wide so we have to think thoroughly and don’t miss anything. It includes: (1) Any course, seminar or conference you attended in the previous year leading to an approved academic, professional or vocation qualification; (2) Any course, seminar or conference you attended in the previous year that is relevant to your current employment, trade, business, profession or vocation; and (3) Any course, seminar or conference that you completed during the two calendar years before the previous year which is relevant to your new employment, trade, business, profession or vocation in the previous year. Do take note that exam fees are considered as one kind of course fees.
Supplementary Retirement Scheme (SRS) is the tax relief by contributing to SRS in the previous year. The system will automatically fill up this part. You may view my video here and read my article here to find out more about SRS.
Foreign Maid Levy (FML) Relief is eligible for a married woman or single mother who is working and hires a foreign maid at home. The tax relief amount is twice the total foreign domestic worker levy paid in the previous year.
NSMan – self / wife / parent refers to the tax relief related to National Service. It is automatically filled up by the system.
Parenthood Tax Rebate (For NEW Claims Only) is a one-time tax relief granted by Singapore Government to parents with new-born child. To enjoy this relief, the new-born child has to be a Singapore Citizen. We can just simply follow the instruction in the website to declare this item.
Above is my introduction to frequently asked questions on tax relief items in tax filing. If you have any questions regarding income tax filing, feel free to contact me for a discussion. I am glad to help.