Saving Money tips on income tax

Making the most out of your income tax relief, you can save yourself some money:

Top up your family members's CPF account

Central Provident Fund (CPF) allows members to top up their families' CPF account. If you decide to use cash to top up the CPF account of family members, who may include grandparents, parents, siblings, and your spouse, the CPF board will grant a tax relief of $7,000 per calendar year.
To qualify for the tax relief with cash top-ups for siblings/spouse, your sibling/spouse must not have income exceeding $4000 in the year preceding the year of the top-up. The sibling / spouse also qualifies without an income test if he is handicapped.

Top up your own CPF account

In addition to topping up your family CPF account, you can top up your own CPF account using cash as long as it is below the minimum sum. The CPF board will grant a tax relief of $7,000 per calendar year for this case. The minimum sum is currently $131,000.

Top up your SRS account

If you do not have a Supplementary Retirement Scheme (SRS) account, do consider opening one. SRS is a financial tool to help Singaporeans save more for their old age. Whereas CPF participation is compulsory, participation in SRS is not. SRS  offers attractive tax benefits. Money set aside in SRS are eligible for tax relief subject to a contribution cap. Only 50% of the money withdrawn from your SRS account is taxable if you withdraw your money after the retirement age. In addition, it is expected that at your retirement age, your income bracket is much lower than your prime career period, this it is possible that you achieve little or no tax when you withdraw your money. The revised annual SRS contribution cap is $12,750 for Singaporeans and Permanent Residents, and $29,750 for foreigner. However, it is important to note that if you withdraw your SRS money before the retirement age, the money withdraw will not enjoy tax concession of 50% and 100% tax will be imposed. Thus, please make sure the money you put in your SRS account is not something you need in the short term.