Do good deeds and pay less tax
We all know that leading a fulfilling life is as much about giving as receiving. Little acts of kindness are all around us. A neighbour who took in the newspapers for you when you were on holiday, a group of aunties who chip in to buy lunch for an elderly man who lives alone, or a retired teacher who gives free tuition to underprivileged children. These gracious deeds help to support people in need.
With the rise in social consciousness, giving – of our time, money or support – should be encouraged as it lifts those who experience setback. By doing good deeds for others, we do our small part to make a positive difference, closing cracks in society so that no one falls through.
Let’s look at some benefits of doing good deeds:
Benefit 1: Building a sense of community
Every act of kindness helps to make a positive difference in someone’s life and also creates a sense of community. When we get together to help someone or contribute towards a cause, it connects us to others who share the same values.
Donating to charity or regular volunteering will also help you to achieve a sense of personal satisfaction and fulfilment, knowing you are contributing to a worthy cause.
Benefit 2: Tax benefits
Making a cash donation, no matter how small, can make a difference to someone’s life. By giving to charity, you can also enjoy tax deductions of 2.5 times the amount of qualifying donation during the next tax season. Do note that this is only if you donate to a charity which is an approved Institution of a Public Character (IPC) for causes that benefit the local community. Also remember to provide your particulars (NRIC/FIN) to the IPC so that your eligible donation is transmitted to IRAS for auto-inclusion in your tax returns.
Tax deductible donations received by IPCs in 2021 was $1.03 billion (Source: Commissioner of Charities Annual Report 2021), showing that the spirit of giving is strong in Singapore.
However, not all registered charities are approved IPCs. Donations made to a charity without approved IPC status are not tax deductible. Learn if an organisation is an approved IPC at the Charity Portal.
Benefit 3: Improved well-being
Research has shown that altruistic behaviour benefits not only the recipient but also the giver. If you volunteer regularly or make cash donations, you are likely to experience a surge in feel-good chemicals like dopamine and endorphins. The result? Improved mental health, lower stress levels and increased happiness for the giver.
Knowing how good giving can be, identify a cause you feel for and donate or volunteer to make a positive impact. For donations given during 2023, you can enjoy tax deductions during the next tax season i.e. Year of Assessment 2024. This 250% tax deduction for qualifying donations has been extended for another 3 years till 31 December 2026.
In brief: Six types of donations which are tax deductible
1. Cash donations
2. Shares donations
3. Artefact donations
4. Donation under the public art tax incentive scheme
5. Land & building donations
6. Naming donations
Learn more about the six types of donations.