Give more and pay less tax
Source: Freepik
Want to know how you can pay less tax next year?
We’d let you in on some tips which will shave some off the tax bill. Be prepared to be surprised. The more you give and share, chances are the less tax you will pay as you will enjoy tax reliefs. Bet you didn’t know that.
Let’s deep dive to see how this works:
Enjoy tax deductions of 2.5 times when you donate for a good cause
Make a cash donation before the year closes to enjoy a tax deduction. The donation will make a positive difference not just to the recipient but the giver too.
As a donor, you will 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.
For donations made in 2024 (from 1 Jan 2024 – 31 Dec 2024), you can enjoy tax deductions during the next tax season i.e. Year of Assessment 2025. This 250% tax deduction for qualifying donations has been extended until 31 December 2026.
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.
Did you know there are 6 types of donations which are tax deductible?
1. Cash donations
2. Shares donations
3. Artefact donations
4. Donations under the public art tax incentive scheme (PATIS)
5. Land and building donations
6. Naming donations
Claim tax relief for cash top-ups to your loved ones’ CPF Special/Retirement Account
It is more blessed to give than to receive.
Making cash top-ups to your parents/parents-in-law and grandparents/grandparents-in-law is a practical love language which will also go a long way to helping them with their retirement needs. You will also enjoy a tax relief for topping up their CPF.
For spouse and siblings with disability, tax relief is also claimable when you top up their CPF Special/Retirement Account.
The maximum relief is $8,000 a year for top-ups made to your family members.
Other conditions for claiming this relief for Year of Assessment 2025, include being a Singapore Citizen or Permanent Resident, and making the cash top-up under the CPF Retirement Sum Topping-Up Scheme ("RSTU") in the year 2024.
New! CPF cash top-ups that attract matching grants under the Matched Retirement Savings Scheme (MRSS) will not be eligible for CPF Cash Top-up Relief from Year of Assessment 2026 (i.e. CPF cash top-ups received from 1 January 2025).
Individuals may continue to enjoy tax relief of up to $16,000 (maximum $8,000 for self and maximum $8,000 for family members) a year for eligible CPF cash top-ups that do not attract MRSS grants.
Claim tax relief for cash top-ups to your own CPF Special/Retirement Account
Take care of your financial well-being by making cash top-ups to your CPF Accounts so that you are prepared for retirement.
You can top up a maximum of $8,000 in cash a year to your Special/Retirement Account by and enjoy tax relief.
Learn more about tax relief for CPF cash top-up.
Total relief cap of $80,000
For each Year of Assessment, a personal income tax relief cap of $80,000 applies to the total amount of all tax reliefs claimed (including any relief on cash top-ups made).
There will be no refund for accepted cash top-up monies. Please evaluate whether you would benefit from tax relief on your cash top-up before you make an informed decision on whether to make a cash top-up.