Tips to reduce personal income tax
By Navin Sregantan
If you’ve only got a minute:
- Understanding your eligibility for personal income tax reliefs and deductions helps to reduce tax and boost your savings.
- Always re-assess your tax reliefs every year to ensure that you do not claim your tax reliefs incorrectly.
- There will be changes to the Working Mother’s Child Relief that take effect from YA 2025.
In the past 2 years, consumers have experienced rising prices of goods and services, increase in mortgage loan rates, as well as Goods and Services Tax (GST) hikes.
With this in mind, it helps to understand our eligibility for personal income tax reliefs and deductions helps to reduce tax and boost savings.
While most individual tax reliefs are similar previous years, there might be some reliefs are applicable to you this year that weren’t before.
For instance, new parents would be able to claim reliefs not available to them as an unmarried individual previously.
When claiming tax reliefs, do remember that there is a total personal income tax relief cap of S$80,000.
To recap, tax-filing for the Year of Assessment (YA) 2024 begins on 1 Mar 2024. If you need to submit an income tax return, please do so by 18 Apr 2024 for e-filing.
We highlight some tax deductions and reliefs that may be relevant to you for YA 2024:
General tax deductions
Deductions on employment expenses
If you are required by your employer to work from home and the resulting incremental home office expenses (such as electricity and telecommunication charges) are not reimbursed by your employer, you can claim these expenses as a tax deduction. Supporting documents must be kept and submitted when requested.
For most of these expenses, you would only be able to claim the difference in the bill amount compared to before working from home.
You can also claim deductions for Wi-Fi monthly subscription fees if the Wi-Fi was set up specifically to enable you to work from home. If you are no longer required to work from home and you choose to continue to subscribe to the service, the subscription fees incurred thereafter would not be deductible.
For households with more than 1 person working from home, IRAS will accept an equal apportionment basis in computing the amount of shared expenses across all working individuals in the same household.
Deductions on donations
You can claim tax deductions of 2.5 times the amount of donations made in 2023. Do note that only cash donations made to an approved Institution of a Public Character (IPC) or the Singapore Government for causes that benefit the local community are deductible donations.
Read more: Tax savings at a glance
Individual tax reliefs
Course Fees Relief
Course Fees Relief is given to encourage individuals to continuously upgrade their skills. For some who might find that they have more time to attend courses last year due to the pandemic, you can claim this relief for certain courses that you have attended.
To qualify for relief, the course attended should lead to a recognised academic and professional qualification. It can include any course, seminar or conference that is relevant to your current profession and business. However, courses for recreational purposes or that teach general skills (Microsoft office, social media skills, internet surfing) will not be eligible.
The relief can be claimed on aptitude test fees, examination fees, registration or enrolment fees and tuition fees. You can claim the actual course fees incurred by yourself up to a maximum of S$5,500 each year regardless of the number of courses, seminars or conferences you have attended. Any amount paid or reimbursed by your employer or any other organisations (including the use of SkillsFuture Credit) cannot be claimed as relief.
Tip: For those with assessable income below S$22,000, you can defer your claim for course fee relief.
Parent Relief
Parent Relief is given to promote filial piety and recognise individuals who are supporting their parents, grandparents, parents-in-law or grandparents-in-law in Singapore.
To claim Parent Relief / Handicapped Parent Relief for YA 2024, you must satisfy all the conditions below:
|
Qualifying Conditions |
Parent Relief |
Handicapped Parent Relief |
|---|---|---|
| The dependant was living in your household in Singapore* in 2023. If the dependant lived in a separate household in Singapore, you must have incurred S$2,000 or more in supporting him/her in 2023. |
Yes | Yes |
| The dependant was 55 years of age or above in 2023. | Yes | Not applicable |
| The dependant is physically or mentally disabled. | Not applicable | Yes |
| The dependant did not have an annual income** exceeding S$4,000 in 2023. | Yes | Not applicable |
Amount of relief
|
Type of Parent Relief |
Parent relief |
Handicapped Parent Relief |
|---|---|---|
| Taxpayer stays with dependant | S$9,000 per dependant | S$14,000 per dependant |
| Taxpayer does not stay with dependant | S$5,500 per dependant | S$10,000 per dependant |
For a full list of general tax reliefs, please refer here.
Tax relief for working mothers
Working mothers can tap on certain tax relief claims, especially if they have hired a domestic helper in the last year or engaged their parents or parents-in-law to help with child-caring duties.
Working Mother’s Child Relief (WMCR)
To claim WMCR in the Year of Assessment (YA) 2024, you must satisfy these conditions in 2023:
- You are a working mother who is married, divorced or widowed;
- You have taxable earned income from employment or through pensions, from trade or business, or through a profession or vocation.
- You have maintained a child who is a Singapore Citizen as at 31 Dec 2023 and has satisfied all conditions under the Qualifying Child Relief (QCR) / Handicapped Child Relief (HCR).
Changes to WMCR in 2025
Come 2025, the WMCR will change from being a percentage of income to a fixed sum, as announced at Budget 2023.
The changes will take effect from the YA2025, which would take into account earnings from 2024. The change will likely benefit working mothers in the lower to middle income groups, i.e. those with annual earned income of approximately S$53,000 and below, who have their first child born or adopted on or after 1 January 2024.
Foreign Domestic Worker Levy (FDWL) Relief
Working mothers with school going children may claim relief for foreign domestic worker levy paid in the previous year. Singles and married men are not eligible for this relief. You may claim twice the total foreign domestic worker levy paid in year 2023 on 1 foreign domestic worker.
Grandparent Caregiver Relief (GCR)
Grandparent Caregiver Relief (GCR) is a tax relief given to working mothers who engage the help of their parents, grandparents, parents-in-law or grandparents-in-laws to take care of their children. The amount claimable is S$3,000.
For you to claim this relief, the caregiver must have been:`
- Living in Singapore in 2023,
- Looking after any of your children who is a Singapore citizen aged 12 and below in 2022; or unmarried handicapped children who is a Singapore citizen in 2023,
- Not working in 2023.
Tip: The Government will lapse the tax relief for Foreign Domestic Worker Levy with effect from YA 2025 while relaxing the conditions for the Grandparent Caregiver Relief (GCR) from YA 2024. To give caregivers the flexibility to work, working mothers may claim GCR where the caregivers’ total income from a trade, business, profession, vocation and/or employment does not exceed S$4,000, subject to conditions.
Claiming personal reliefs incorrectly may lead to penalties
IRAS reminds taxpayers to claim personal reliefs only if they meet the qualifying conditions for the reliefs.
If you are e-Filing, personal reliefs that you claimed and were granted last year would usually be automatically included in your tax return. Please check and remove the relief claims if you are no longer eligible for them. Penalties may be imposed for any incorrect claim of relief.
Tips on claiming personal reliefs
Avoid wrongful claims of personal reliefs by checking if you meet the qualifying conditions for each one. You can also use the personal relief checker available on the IRAS website.
Find out more: All you need to know about Tax Season 2024
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Disclaimers and Important Notice
This article is meant for information only and should not be relied upon as financial advice. Before making any decision to buy, sell or hold any investment or insurance product, you should seek advice from a financial adviser regarding its suitability.
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