The Supplementary Retirement Scheme (SRS) is a voluntary savings scheme in Singapore that encourages individuals to save for their retirement. Contributions made to an SRS account are eligible for tax relief, making it a popular choice for many individuals looking to reduce their tax burden. In this article, we’ll discuss how to contribute to an SRS account and claim tax relief.
Step 1: Open an SRS Account
The first step is to open an SRS account with one of the three local banks (DBS, OCBC, or UOB) or any of the five approved SRS operators. You can apply for an SRS account online or visit the branch in person to submit the necessary documents.
Step 2: Decide on Your Contribution Amount
You can contribute any amount to your SRS account up to the annual contribution limit. The limit is currently $15,300 for Singapore citizens and permanent residents and $35,700 for foreigners. It’s important to note that contributions to your SRS account are not refundable, so you should only contribute what you can afford to save for the long term.
Step 3: Make Your Contribution
You can make your contribution to your SRS account through online banking, ATM, or at the bank branch. If you’re contributing through online banking or ATM, you’ll need to provide your SRS account number and the amount you wish to contribute. If you’re making the contribution at the bank branch, you’ll need to bring along your SRS account passbook or statement.
Step 4: Claim Tax Relief
Once you’ve made your contribution, you can claim tax relief in the following year when you file your income tax return. The tax relief amount is based on your contribution amount, and the maximum relief you can claim is $15,300 for Singapore citizens and permanent residents and $35,700 for foreigners. The tax relief is deducted from your taxable income, which reduces your tax liability.
To claim tax relief, you’ll need to indicate the amount of your SRS contribution in your tax return form. The tax relief will then be automatically computed and reflected in your tax assessment.
In conclusion, contributing to an SRS account is an excellent way to save for retirement and reduce your tax liability. By following these simple steps, you can make your contribution and claim tax relief easily. However, it’s essential to remember that SRS contributions are meant for long-term savings, so make sure to plan your contributions wisely to maximize your benefits.