I filed my income tax return for the Year of Assessment 2013 (YA 2013) online.
Although I received more income last year, I will be paying less income tax for YA 2013 compared to the year before. Incredulous? How could this be? Could it be true?
Regular readers would know that a large portion of my income is passive and non-taxable. So, to pay less income tax for YA 2013 compared to the year before, did my earned income from employment decline? Nope, it remained more or less the same as the year before although the probability that it could decline in future exists.
The lower than expected estimated income tax for YA 2013 is because of donations I made to 6 charitable organisations last year which enjoy 2.5x tax deduction and the 30% personal income tax rebate I am eligible for from the government.
Of course, I am pleased to be paying less tax but I am happier still that I am doing good with my donations to several recognised charities in Singapore.
If we can afford it, let us be charitable and donate to the less privileged. We will also pay less income tax in the process. Everybody wins. Sounds good, doesn't it?
If you are wondering about the personal income tax rebate, the following table is taken from IRAS:
|Age as at 31 Dec 2012||Personal Income Tax Rebate for the Year of Assessment 2013|
|Below 60 years||30% of tax payable, subject to a cap of $1,500|
|60 years and above||50% of tax payable, subject to a cap of $1,500|
What I have also been doing every year is to contribute to my SRS account to the maximum amount allowed. This has been a big help in reducing the amount of income tax payable. I would encourage anyone who is currently paying income tax and who does not have an SRS account to consider starting one.
So, is it possible to pay less income tax while making more money and doing good? Yes, of course!
If you tell your family and friends about this and they don't believe you, share or like this page and tell them that if AK71 can do it, so can you! Believe in yourself.
1. Counting our blessings.
2. SRS: A brief analysis.
3. 2012 full year passive income from S-REITs.