Besides preparing for the busy festive season, one of the items that appears on my to-do list every December, is to remember to make my contribution to my Supplementary Retirement Scheme (SRS) account.
What is Supplementary Retirement Scheme (SRS)?
As its name suggests, SRS was created by the government as a voluntary programme to encourage Singaporeans as well as foreigners to build up their retirement nest egg while at the same time enjoy tax reliefs.
Mr Chan, a Singaporean, had a chargeable income of $200,000 in the year 2014. For the year of assessment 2015, his annual income tax payable was $20,750.
If Mr Chan had contributed $12,750 to his SRS account, his income tax payable would be $18,582. He would have saved $2,168 in tax, approximately 10%!
Contributions to SRS can be used to purchase a wide range of investment instruments, including shares, bonds, unit trusts, FDs, annuities and certain types of insurance. To start contribution, you will need to first open an SRS account with any of the local banks and then deposit the monies into the account.