Ways to Reduce Personal Income Tax

 in Singapore

Singapore is well known for having one of the most competitive tax systems in the world. Personal income tax rates are progressive and relatively low compared to many developed countries. However, many individuals are not fully aware that the government also provides a variety of personal income tax reliefs, rebates, and deductions that can significantly reduce their tax burden even further.

These schemes are designed to support working individuals, families, and retirement planning. By understanding how personal income tax rebates and personal income tax deductions work, taxpayers can legally reduce their taxable income while remaining fully compliant with regulations set by the Inland Revenue Authority of Singapore (IRAS).

In this article, we will explore several common tax reliefs and rebates available to individuals in Singapore, and how they can help you lower the amount of tax you pay.

Read more: Tax Planning in Singapore: 8 Essential Things You Must Know

Understanding Tax Reliefs, Rebates and Deductions

Before we discuss the various tax reliefs, rebates, and deductions you can claim, you need to understand the difference between those terms.

Tax reliefs and tax deductions both subtract from your total income, giving you the amount chargeable for your income, but that’s where their similarities end. 

• Tax Reliefs

Policy-driven incentives that encourage specific socio-economic behaviors, such as child birth or education. They are mostly targeted towards individuals and families in Singapore.

• Tax Deductions

Expenses incurred in producing income that are allowed to be deducted from the gross income by the government. They usually apply to businesses, corporations, or individuals that generate income.

• Tax Rebates

Time-limited financial support given out by the government during the yearly budget announcement. It subtracts a percentage or a fixed amount from your tax payable amount. 

The following table hopefully gives you a clearer understanding of the relationships between the terms:

Related: 9 Facts of Income Tax Return: Don't Make Mistake

Tax Relief

Below are a few of the many tax reliefs provided by the Singaporean government. However, it should be noted that the maximum amount of tax relief an individual can claim per financial year is capped at $80,000.

• Earned Income Relief

Individuals will receive Earned Income Relief if they have taxable earned income from employment, pension, or business activities in the previous year. The amount of relief granted is largely based on the age of the individual, with the maximum amount claimable being $1,000 for people below the age of 55, $6,000 for people aged 55 to 59, and $8,000 for people aged 60 and above. This relief is automatically granted based on eligibility.

• Parent Relief

Parent Relief is for those who supported their dependents (i.e. parents, parents-in-law, adoptive parents, grandparents, etc.) in their home in Singapore. The dependents must be older than 55 and have an annual income of less than $8,000 in the previous year. The taxpayer can claim $9,000 per dependent, or S$,500 per disabled dependent, for a maximum of two dependents.

• Life Insurance Relief

Life Insurance Relief is given to individuals who have paid insurance premiums on their own life insurance policies. To qualify, your total compulsory CPF contribution must be less than $5,000 in the year preceding the Year of Assessment (YA). The relief amount is either the difference between $5,000 and your CPF contribution for the YA, up to 7% of the insured value of your own/your wife's life, or the amount of insurance premiums paid, whichever is lower.

• CPF Relief of Employee

You may claim CPF Relief for making compulsory employee CPF contributions and voluntary contributions to your MediSave Account. The relief amount is equal to the amount you contributed that year, but it is capped by the Ordinary Wage (OW) ceiling, which is $8,000 per month and $102,000 per year. It is also capped by the Additional Wage ceiling, which is $102,000 minus the total OW subjected to CPF for that relevant year.

Tax Deduction

If you have additional income outside of your salary, you can also claim tax deductions to further lower your income tax. Below are some of the tax deductions that can be claimed:

• Rental income tax deduction

If you leased or rented a property to another person, you can claim tax deduction on the expenses incurred solely for producing the rental income and during the period of tenancy. Expenses such as the repair, insurance, or maintenance of the property can be deducted against your rental income, even during vacancy periods, provided that reasonable efforts have been made to find a new tenant in between leases.

• Employment expenses deduction

Employment expenses may be deducted from your employment income if they are incurred for the purpose of carrying out your official duties, not reimbursed by your employer, and not capital or private in nature. Some employment expenses include client entertainment fees, subscriptions paid to professional bodies, travelling expenses incurred on public transport, and electricity and telecommunication fees if you are working from home.

• Tax-deductible donations

Making donations is also a tax-deductible expense, specifically when you donate cash, shares, artefacts, land and building, or to name an organisation’s facilities, events, programmes, or collaterals. You can claim a 250% tax deduction on the qualifying expenditure amount if your donation is made to any approved Institution of Public Character (IPC). Learn if an organisation is an approved IPC here.

Tax Rebate

As mentioned above, tax rebates are temporary incentives given by the government, so their availability varies from year to year. As of the writing of this article in 2026, the Parenthood Tax Rebate (PTR) is available for claim.

The PTR is given to tax residents to encourage them to have more children. The rebate amount is $5,000 for the first child, $10,000 for the second child, and $20,000 for the third and each subsequent child to be born or adopted. Parents can apportion the rebate amount freely between them, and any unutilised amount will automatically be carried forward to offset the future income tax payable.

Final Thoughts

The Singaporean government provides a wide variety of tax reliefs, rebates, and deductions to help lower your personal income tax bills. However, you should make sure that your claims for the relevant tax benefits are well justified, with supporting evidence kept for at least 5 years for verification purposes.

If understanding personal income tax reliefs and personal income tax deductions feels overwhelming, you don’t have to do it alone. We are here to help. Contact Accounting Superhero now to ensure accurate filing and maximised tax benefits.

Source:

IRAS