Tax

SRS Contributions

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The Supplementary Retirement Scheme (SRS) is a voluntary scheme to encourage individuals to save for retirement, over and above their CPF savings. Contributions to SRS are eligible for tax relief. Investment returns are tax-free before withdrawal and only 50% of the withdrawals from SRS are taxable at retirement.

 

Qualifying for SRS Contributions :

Singapore Citizens, Singapore Permanent Residents (SPRs) and foreigners who derive any form of income can make SRS contributions in the current year. You must be:
* At least 18 years of age;
* Not an undischarged bankrupt;
* Not suffering from a mental disorder; and
* Capable of managing yourself and your affairs.

Your employer can also contribute part of your remuneration to your SRS account on your behalf.

The amount contributed is your remuneration and is hence taxable.

You will be given a tax relief on the SRS contribution made by your employer on your behalf.

 

Opening of SRS Account :

SRS Accounts are managed by three SRS operators. To begin making contributions, you must first open an SRS Account with one of them.�The three SRS operators are:
* DBS Group Holdings Ltd
* Overseas-Chinese Banking Corporation (OCBC) Ltd
* United Overseas Bank (UOB) Ltd
When opening an SRS Account, the SRS operator will require the following documents:
* Identity card (for Singapore Citizens / SPRs)
* Completed Declaration Form for SRS (77KB) for foreigners

You can only have one SRS account at any point in time. However, you can transfer your account between different SRS operators. It is an offence to open SRS accounts with more than one operator and there are penalties for doing so.

 

Amount of SRS Contributions :

Please note that there will be a personal income tax relief cap of $80,000, which will apply from the Year of Assessment (YA) 2018.

This cap applies to the total amount of all tax reliefs claimed, including any relief on SRS contributions made on or after 1 Jan 2017.

There will be no refund for SRS contributions made. As such, taxpayers who make SRS contributions on or after 1 Jan 2017 should take note of the overall personal income tax relief cap.

You should evaluate whether you would benefit from tax relief on your SRS contributions, and make an informed decision accordingly.

 

Making SRS Contribution :

All contributions must be made by 31 Dec of the year or as your SRS operator requires, to be eligible for SRS tax relief.

You and/or your employer can continue to make SRS contributions as long as you have not made any withdrawals from your SRS account:
* At or after reaching the statutory retirement age that was applicable when you made your first SRS contribution;
* On medical grounds.

 

SRS tax relief :

If you have contributed to the SRS, you can claim SRS Tax Relief in the Year of Assessment following the year of contribution. You must first be a tax resident before claiming the relief for that Year of Assessment.

 

Who Can Claim Relief :

You are entitled to a SRS tax relief in the Year of Assessment (YA) following the year of contribution.

However, you have to be assessed as a tax resident for that YA.

Non-residents are not eligible for any tax relief.

Hope the above helps you a bit more in your coming year end tax planning.

If you need help, feel free to contact us at :

(O) +65 63851011

(M) +65 90880669

(E) [email protected]

www.corporatebackoffice.com.sg

Written by Kelvin Loh