Tax reliefs, deductions, and rebates

If you’re earning enough to be taxed, you should also know how to lower your bill. That’s where tax reliefs and deductions come in. They reduce how much of your income gets taxed, which means you get to keep more of your money. Whether you’re supporting your parents, or topping up your CPF, there might be savings you didn’t even know you qualified for.

Tax reliefs and deductions you can claim:

Tax reliefs and deductions reduce the amount of your income that gets taxed. Not the tax itself, but what the tax is calculated on. Some of the commonly used tax reliefs and deductions you may claim during tax filing are:

Common tax reliefs

• CPF Relief: Generally, automatically claimed if you made qualifying CPF/ MediSave contributions as an employee or self-employed person in the previous year. However, if your employer is not under the Auto-Inclusion Scheme (AIS) and not submitting your employment income details to IRAS, you will need to declare your CPF relief when filing your income tax return.
• Life Insurance Relief: If you have paid insurance premiums in the previous year for your own or your wife’s life insurance policy.
• Parent Relief/ Parent Relief (Disability): If you have supported your parents, grandparents, parents-in-law and grandparents-in-law.
• Spouse Relief/ Spouse Relief (Disability): If you have supported your spouse in the previous year.
• Qualifying Child Relief (QCR) / Child Relief (Disability): If you are a parent who raised/ maintained a child in the previous year.
• Working Mother Child Relief (WMCR): For female taxpayers only: if you are a working mother who had taxable earned income and maintained a Singapore Citizen child (eligible for QCR / Child Relief (Disability)) in the previous year.
• Grandparent Caregiver Relief: For female taxpayers only: if you are a working mother who engaged the help of your parents/ grandparents (including in-laws) to take care of your child who is a Singapore Citizen aged 12 and below in previous year. There is no age limit for unmarried child who is physically/mentally disabled.

Common tax deductions

• Deduction on employment expenses: If you incurred allowable employment expenses while carrying out official duties (e.g. travelling expenses incurred on public transport, work from home expenses) which were not reimbursed by your employer.
• Deduction on business expenses: If you incurred allowable business expenses that is only for business purposes and are not prohibited under the tax law. Qualifying self-employed persons such as commission agents, private-hire car/ taxi drivers and delivery workers can claim a deemed amount of business expense based on a prescribed percentage of the gross income earned.
• Deductions on rental expenses: If you incurred expenses related to your rental income and these expenses were incurred during the period of tenancy. Alternatively, property owners who lease their residential properties can claim mortgage loan interest expenses and deemed rental expenses based on 15% of their gross rental income.
• Deductions on donations: Automatically claimed if you have made donations to Community Chest or any approved Institution of a Public Character (IPC). See our article on ‘Give smart: Reduce your taxes with charitable giving and CPF contributions’.

For more details including the qualifying conditions for each type of tax reliefs and deductions, visit IRAS’ Tax Relief and Deductions webpage.

What about tax rebates?

Tax rebates are direct discounts on your tax bill. While tax reliefs and deductions reduce your taxable income, rebates kick in after your tax has been calculated. It’s like the final voucher you apply at checkout to reduce the actual amount you need to pay.

If you owe $500 in tax and have a $200 rebate, you only need to pay $300.

Common tax rebates:

• Personal income tax rebate: Occasionally given by the government and applied automatically.
• Parenthood Tax Rebate: Up to $20,000 per child, for parents who are Singapore tax residents. Can be used across multiple years until the amount is fully utilised.

These are usually auto-applied by IRAS, so you don’t need to claim them unless stated.