How to Reduce Income Tax Legally in Singapore – Slash Your Bill Fast

Tired of watching your hard-earned money disappear to taxes every April? You’re not alone – but you don’t have to accept it. Singapore’s progressive income tax system offers numerous legal opportunities to reduce your tax burden, yet most people leave thousands on the table simply because they don’t know what’s available.

The difference between savvy taxpayers and everyone else isn’t luck – it’s knowledge. While your colleagues pay full price, you could be keeping significantly more of your income through the strategic use of tax reliefs, deductions, and family benefits that the Singapore government actively encourages.

This guide reveals the proven strategies that could save you thousands in personal income tax, all while staying completely within IRAS regulations. From maximizing retirement contributions to claiming overlooked deductions, we’ll show you exactly how to reduce income tax legally and effectively.

Maximize Retirement Contributions – Your Biggest Tax Win

CPF Top-Ups: The S$16,000 Annual Opportunity

CPF Top-Ups: The S$16,000 Annual Opportunity

The Central Provident Fund (CPF) cash top-up relief represents one of Singapore’s most generous tax reduction mechanisms. Under the Retirement Sum Topping-Up Scheme, you can claim tax relief for voluntary contributions to your own or family members’ CPF accounts.

Here’s how it works:

• Self top-ups: Up to S$8,000 annual tax relief for cash top-ups to your own Special Account or Retirement Account
• Family top-ups: Additional S$8,000 relief for topping up parents, grandparents, spouse, or siblings’ accounts
• Total potential: S$16,000 in annual tax relief
• Real Impact: If you’re in the 11.5% tax bracket, maximizing both reliefs saves you S$1,840 annually. Higher earners in the 22% bracket save S$3,520.

Supplementary Retirement Scheme – Tax-Deferred Growth

The SRS account offers another powerful avenue for tax savings:

• Contribution limits: S$15,300 annually for Singaporeans and PRs; S$35,700 for foreigners
• Immediate relief: Every dollar contributed reduces your chargeable income
• Long-term benefit: Withdrawals after retirement age are only 50% taxable



A middle-income earner contributing the full S$15,300 to their SRS account could save between S$1,071 to S$2,295 in taxes, depending on their bracket

Claim Every Eligible Deduction – Hidden Money in Plain Sight

Course Fees Relief – Invest in Yourself, Save on Taxes

Professional development isn’t just good for your career – it’s tax-deductible. Course Fees Relief allows claims up to S$5,500 annually for job-relevant courses, seminars, and exams not reimbursed by your employer.
Tip: Keep proof of payment and course details — IRAS may require supporting documents during review.

Key requirements:

• The course must relate to your current employment
• Not financed by your employer
• Includes examination and tuition fees

Charitable Donations – The 2.5x Multiplier

Singapore rewards generosity through one of the world’s most favorable charitable tax deductions. Cash donations to approved Institutions of a Public Character (IPCs) qualify for 2.5 times tax relief.

Example: Donate S$2,000, claim S$5,000 in tax relief. For someone in the 15% bracket, this translates to S$750 in actual tax savings, meaning your S$2,000 donation effectively costs you only S$1,250.

Both corporate and individual donors benefit from this enhanced relief, making charitable giving a win-win for your taxes and the local community.

💡 Not sure how to claim these deductions correctly?

CFO Group’s tax specialists make it easy to unlock every relief and deduction, without confusion or risk.

Rental Property Expenses – Maximize Your Investment Returns

Property investors can significantly reduce their rental income tax burden through allowable expenses:

• Mortgage interest: Fully deductible against gross rental income
• Property tax: Direct deduction from gross rent
• Maintenance and repairs: All reasonable expenses incurred
• Alternative: 15% automatic deduction from net rental income if you prefer simplicity



For rooms rented out in your residential property, these deductions can substantially reduce your taxable rental income.

Rental Property Expenses – Maximize Your Investment Returns

Singapore’s tax system recognizes family obligations through generous personal reliefs.

Parent and Dependent Relief

• Standard parent relief: S$9,000 per parent living with you; S$5,500 if living separately
• Handicapped parent relief: Up to S$14,000 per dependent parent
• Income requirement: Dependent’s annual income must not exceed S$4,000

Working Mother’s Child Relief (WMCR)

• Graduated benefits (for children born before 1 Jan 2024): 15% of earned income for the first child, up to 25% for the third and subsequent children
• For children born on or after 1 Jan 2024: Fixed amounts apply — S$8,000 (1st child), S$10,000 (2nd), and S$12,000 (3rd+), subject to the total relief cap of S$80,000
• Additional support: Grandparent caregivers can receive relief of up to S$3,000, provided the grandparent’s annual income does not exceed S$8,000 and they assist in caring for the child without being employed as a domestic helper

Real-World Case Study
A working mother earning S$80,000 annually with two children, supporting her retired mother, might combine:

• S$16,000 CPF relief (self and parent top-ups)
• S$5,000 charitable donation relief (2.5x multiplier)
• S$9,000 parent relief
• S$10,800 WMCR (15% + 20% of earned income)
• S$2,000 course fees relief



Total reduction in taxable income: S$42,800 — translating to S$1,400–S$2,700 in actual tax savings.

How It Works – Your Tax Reduction Action Plan

1. Assess Your Situation

Start your tax planning by reviewing the previous year’s income tax return and identifying applicable relief categories. Calculate your projected annual income and determine which tax reliefs and deductions apply to your situation.

Key considerations:

• Current income level and tax bracket
• Family dependents and their eligibility
• Investment properties and rental income
• Professional development needs

2. Maximize Contributions Before Year-End

Timing is critical for tax relief claims. All voluntary contributions and cash donations must be completed by December 31 to qualify for the following Year of Assessment (YA).



December deadline checklist:

• CPF cash top-ups to your accounts and eligible family members
• SRS account contributions
• Deductible donations to approved institutions
• Course enrollment and fee payments

3. File Smart by April 18th

Submit your income tax return through IRAS’s myTax Portal, ensuring all eligible deductions are claimed with proper supporting documents.

Filing essentials:

• Maintain receipts for all claimed expenses
• Document family member eligibility for reliefs
• Track CPF contribution confirmations
• Record charitable donation acknowledgments

Note: The annual income tax relief cap of S$80,000 limits total personal relief claims, but most taxpayers won’t approach this threshold through standard reliefs.

Get Started Today – Don’t Leave Money on the Table

Tax season waits for no one, and the April 18th filing deadline approaches faster than you think. Every day you delay implementing these strategies is money left on the table.

The beauty of Singapore’s tax system lies in its transparency and accessibility. These aren’t complex loopholes – they’re legitimate reliefs designed by the Singapore government to encourage retirement savings, family support, and community contribution.

Your next steps:

• Calculate your potential savings using the strategies outlined above
• Set up automatic CPF top-ups to maximize your relief consistently
• Review your family situation for additional dependent relief
• Plan your professional development to claim Course Fees Relief



The difference between paying full taxes and optimizing your burden often comes down to knowledge and action. You now have the knowledge – the action is up to you.

Remember:

All strategies outlined here comply with current IRAS regulations. Individual circumstances vary, so consider consulting a tax professional for complex situations involving substantial business income or multiple revenue streams.

Too Complicated? CFO Group Can Help You Reduce Your Tax — Fast

Let’s face it — knowing how to reduce income tax is one thing. Actually doing it right (and legally) before the IRAS deadline? That’s another story.

That’s where we come in.

At CFO Group, we help hardworking individuals, entrepreneurs, and families unlock every legal tax relief they’re entitled to — without the headache, guesswork, or compliance risks. From CPF and SRS optimization to family reliefs and deductible planning, our tax professionals handle it all — and get it done on time.