This Parent Relief scheme by the Inland Revenue Authority of Singapore (IRAS) provides tax relief to individuals who financially support their elderly parents, grandparents, or other qualifying dependents.
This scheme is aimed at income tax relief to taxpayers by lowering chargeable income and thus tax liability. Therefore, it is necessary to know the eligibility requirements, amounts for claims, and how to claim them to reap maximum tax benefits.
What is Parent Relief?
Parent Relief is a tax deduction that provides IRAS for persons who care for and financially support their older parents or other qualifying dependents. The relief recognizes the taxpayers’ contribution as caregivers and relieves them somewhat of the financial burden.
Who Qualifies for Parent Relief?
In order to receive Parent Relief, the dependent must be either a Singapore citizen, a PR, or a tax-resident. The dependent is to have stayed in Singapore for at least eight months in the financial year on which the assessment is based. The annual income of the dependent, inclusive of pensions or passive income, cannot exceed the amount stipulated by IRAS.
Claimable amount and types of relief
The various amounts of direct tax relief depend on whether or not the dependent is living with the taxpayer, with a greater amount of relief given if the dependent resides under the same roof as the taxpayer. In cases where multiple taxpayers support the same dependent, the relief may be apportioned. These amounts claimable are reviewed every so often by the IRAS, and taxpayers should check this for any updates every tax year.
How to apply for Parent Relief
Parent Relief can be claimed on an individual’s income tax return. Details of the dependent must be entered, and eligibility must be confirmed. If IRAS requires any further evidence, this will be requested. Any incorrect submission of information may attract penalties or lead to rejection of the claim.
Taxpayer Considerations
Taxpayers applying for Parent Relief must ensure that all qualifying conditions are satisfied. If the dependent is receiving financial support from multiple members of the family, coordination should ensure determination of how the relief is to be shared. Also, taxpayers would need to keep evidence of support that was being financially given to the dependents, in case of any inquiry from IRAS.
Conclusion
IRAS Parent Relief gives meaningful tax deductions to people who care for aging dependents in Singapore. Taxpayers should understand eligibility criteria, claimable amounts, and the application procedure, allowing them to plan their tax filing systems to increase their benefits.