SRS Tax Relief 2024, How SRS Tax Relief Works?, Who can Claim It?

Explore the details of SRS Tax Relief 2024: Uncover the Amount, Mechanism, and Eligibility Criteria. Alongside CPF, delve into the Supplementary Retirement Scheme, an elective initiative urging individuals to save a portion of their earnings for retirement. Essential insights on SRS Tax Relief are provided for SRS members’ awareness.

SRS Tax Relief 2024

Initiate retirement planning now; commence your SRS account promptly. To join SRS, applicants require a passport and, for immigrants, the SRS Declaration Form. Investing in SRS offers not just tax benefits but also opportunities to augment savings.

Here are various financial goals and objectives that individuals with an SRS account can fulfill:

Contributions to the SRS account qualify for tax relief, encouraging employees to save while enjoying tax advantages and reducing taxable income.

Although the SRS account is primarily intended for retirement savings, early withdrawals before reaching the retirement age incur penalties and taxation.

Contributors are subject to specific contribution limits set by the SRS. For Singaporeans, the annual contribution limit is capped at $15,300, while non-residents must contribute more, up to $35,700.

In summary, while the SRS offers access to funds at a certain age, it entails various restrictions and specific tax benefits.

How SRS Tax Relief Works?

The primary benefit of participating in SRS is evident during retirement, where only 50% of the fund is subject to taxation, while the remaining 50% is tax-exempt. SRS permits members to contribute funds, whether in cash or through share purchases, with withdrawal options entirely at the discretion of the individual. They can opt for a lump-sum withdrawal or spread it over a period of up to 10 years.

However, members who withdraw funds before reaching retirement age incur a 5% penalty. In cases of critical illness or death before reaching the age of 62, members may not fully avail themselves of the benefits but can request early withdrawal from SRS. Individuals facing severe illness can provide medical evidence to claim a tax exemption of up to $400,000.

Who can Claim It?

For eligible candidates who have contributed to SRS during their working years, accessing their funds becomes possible upon reaching the specified age criteria. Before delving into the main topic, it’s important to consider certain eligibility criteria:

  1. The applicant must be a Singaporean citizen or hold permanent residency.
  2. Contributors must be at least 18 years old.
  3. Employment is a requirement for managing the funds. Note: Individuals with mental illness are not eligible for the scheme.

Only tax residents for the Year of Assessment 2023 are eligible for tax relief in 2024. Those with suspended accounts or who have previously claimed their funds are ineligible for tax relief. To maximize benefits, members are advised to withdraw funds at age 62, as no penalty is incurred for withdrawal. Authorities are working to raise the retirement age from 62 to 65 by the year’s end, impacting members seeking early benefits through SRS.

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How Much is SRS Tax Relief?

For the year 2024, the claimable amount of personal income from the Year of Assessment 2023 is limited to $80,000. Track your balance effortlessly by creating a login to Digibank. Contributors have the flexibility to withdraw funds at any time in cash or invest them in various investment instruments.

Opting to invest in the SRS fund can yield higher returns than traditional avenues. We advise seeking guidance from financial experts or reaching out to the hotline number provided on the SRS website for any inquiries.

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