Recently, the government announced several Budget inititatives that aim to improve the lives of Singapore citizens. Most of the Budget goodies are targeted at the lower income group and I suppose most of the less well-off households in Singapore will benefit from the 2013 Budget. As I fell into the middle-income bracket, the only Budget goodies that I may be entitled would be the GST Vouchers and the 30% personal tax rebate.
Difference between Income Tax Relief and Income Tax Rebate
In Singapore, citizens are eligible for various applicable tax relief and rebate. It is important that tax payers understand the difference between tax relief and rebate because it can help tax payers to save thousand of dollars. Essentially, reliefs are deductibles which you can claim on your total income taxable while rebates are offsets on your tax payable.
Parenthood Rebate and Qualifying Child Relief
This year, I can qualify for both the Parenthood Rebate of $5000 and Qualifying Child Relief of $4000 because of my baby girl. Personally, I like the Parenhood Rebate scheme very much because of its flexibility – spouse can choose to transfer the rebate to partner and tax payers can also transfer excess qualifying rebates to the following assessment years.
Note: The above are just my sharing of thoughts. It is not meant to be financial advice to readers. Readers should log on to the IRAS website and carefully look through the eligibility for each scheme before applying for these schemes.