How we tax withdrawal
You can withdraw funds from your SRS account any time. Withdrawals can only be made in cash. However, the time of withdrawal determines the taxable amount of the sum withdrawn.
Example
If you withdraw $8,000 from your SRS account upon retirement (i.e. at or after 62 years old), only 50% (i.e. $4,000) of the withdrawal amount will be regarded as part of your income and subject to tax based on the tax rate applicable to you.
For early withdrawal, a 5% penalty will be imposed.
Example
If you withdraw $5,000 from your SRS account before retirement (i.e. early withdrawal), 100% of the withdrawal amount will be regarded as part of your income and subject to tax based on the tax rate applicable to you.
In addition, a 5% penalty on the withdrawal amount (i.e. $250) will be imposed. The SRS operators will withhold the penalty amount (to transmit to IRAS) and give you the net balance (i.e. $5,000 - $250 = $4,750).
| Types of withdrawal |
Amount subject to tax |
| Withdrawal upon retirement (see note 1 below) |
50% of amount withdrawn
|
| Withdrawal in the form of annuities |
50% of the annual stream |
| Penalty free early withdrawals: |
|
|
50% of the 'Deemed withdrawal' amount
|
|
|
50% of amount withdrawn
|
- Withdrawal in one lump sum by a foreigner (excluding SPR).
He/She must have maintained the SRS account for at least 10 years from the date of first contribution and have been a non-Singaporean for a continuous period of 10 years before the date of withdrawal.
|
50% of amount withdrawn
|
|
|
100% of amount withdrawn
|
Early withdrawals (before retirement) with 5% penalty
- SRS operator will complete Form PMP (78KB) to account for the penalty on premature withdrawal by Singapore citizens and Form IR37B (80KB) for SPRs and foreigners.
|
100% of amount withdrawn |
Note 1 : You can withdraw your SRS monies over 10 years from the date of your first penalty-free withdrawal. Withdrawals are penalty-free only if they take place after the statutory retirement age that was prevailing at the time of your first SRS contribution. The statutory retirement age for all SRS members is currently at 62.
Spreading out your withdrawals will generally result in greater tax savings.
Note 2 : Under the Income Tax Act, where an SRS member dies, any sum standing in his SRS account shall be deemed to be withdrawn ('Deemed withdrawal' amount) on the date of his death even though no physical withdrawal may have been made on that day.
When is it taxable
Withdrawals from SRS accounts are subject to tax in the Year of Assessment (YA) following the year of withdrawal.
Example
If you withdraw $6,000 from your SRS account in 2011, either 50% or 100% of the withdrawal amount (depending on the type of withdrawal) will be regarded as part of your income in 2011.
This amount is subject to tax for the YA 2012 based on the tax rate applicable to you.
If you are a non-Singaporean who no longer work and live in Singapore, you will be taxed as a non-resident when you withdraw the fund from your SRS account.
How we determine withdrawal period
You can withdraw your SRS monies over 10 years from the date of your first penalty-free withdrawal. Withdrawals are penalty-free only if they take place after the statutory retirement age that was prevailing at the time of your first SRS contribution. The statutory retirement age for all SRS members is currently at 62.
Example 1
| |
Age |
Remarks |
| Statutory retirement age when you make your first contribution |
62 |
Start of the withdrawal period |
| Age when you choose to make your first withdrawal |
62 |
First withdrawal |
|
|
You can spread your withdrawals until you reach age of 72 (that is, 10 years from age of 62).
This marks the end of your withdrawal period. |
Example 2
| |
Age |
Remarks |
| Statutory retirement age when you make your first contribution |
62 |
Start of the withdrawal period |
| Age when you choose to make your first withdrawal |
64 |
First withdrawal |
|
|
You can spread your withdrawals until you reach age of 74 (that is, 10 years from age of 64).
This marks the end of your withdrawal period. |
Balances in SRS account
The balance of your SRS account is made up of your SRS contribution and investment returns accumulated over the years.
The amount (except for life annuities) in the SRS account will be deemed to be withdrawn immediately after the end of the withdrawal period.
The SRS operator will report 50% of such balance to IRAS and this is subject to tax in the following year.
For investments in life annuities, the withdrawal period does not apply. So long as you continue to receive your annuity streams in perpetuity, 50% of the annual stream will be subject to tax.
At the end of withdrawal period
You may withdraw the balance from the SRS account at the end of the withdrawal period.
If you choose not to withdraw the balance and leave the balance with the SRS operator, returns from such investments will be subject to the same tax treatment as any other investments in future.
How to report
You need not declare the withdrawal.
The information will be electronically transmitted to IRAS from the SRS operators and will be included in your tax assessment.
Find out more about how to submit your tax return.