Mr and Mrs Chua have 3 children who were 8, 10 and 12 years old in 2016. Mr Chua claims the full amount of QCR of $12,000 (i.e. $4,000 x 3) on their three children.
Mrs Chua had an earned income of $125,000 for 2016. She claims NSman Wife Relief, WMCR and Foreign Domestic Worker Levy Relief. For 2017, she had the same income and claimed the same reliefs.
Mrs Chua is a Singapore tax resident. The comparison of her tax computations for YA 2017 and YA 2018 is as follows:
| YA 2017 | YA 2018 |
---|
Employment Income of Mrs Chua | $125,000 | $125,000 |
Less: Personal Reliefs | | |
- Earned Income Relief | $1,000 | $1,000 |
- CPF Relief | $20,400 | $20,400 |
- NSman Wife Relief | $750 | $750 |
- WMCR on 1st child | $18,750 (15% x $125,000) | $18,750 (15% x $125,000) |
- WMCR on 2nd child | $25,000 (20% x $125,000) | $25,000 (20% x $125,000) |
- WMCR on 3rd child | $31,250 (25% x 125,000) | $31,250 (25% x 125,000) |
- Foreign Domestic Worker Levy Relief | $1,440 | $1,440 |
Total Personal Reliefs | $98,590 | $98,590 |
Total Personal Reliefs after capping (for YA 2018) | Not applicable | $80,000 |
Chargeable Income | $26,410 ($125,000 - $98,590) | $45,000 ($125,000 - $80,000) |
Tax on First $20,000 | $0 | - |
Tax on Next $6,410 @ 2% | $128.20 | - |
Tax on First $40,000 | - | $550 |
Tax on Next $5,000 @ 7% | - | $350 |
Gross Tax Payable by Mrs Chua | $128.20 | $900 ($550 + $350) |
Less: Personal Income Tax Rebate (20% of tax payable, up to a cap of $500) | $25.64 | N/A |
Net Tax Payable | $102.56 ($128.20 - $25.64) | $900 |
Notes:
1. The overall personal income tax relief cap of $80,000 takes effect from YA 2018. Hence, the total amount of reliefs claimed by Mrs Chua is not capped for YA 2017.
2. As the total amount of personal reliefs claimed by Mrs Chua exceeds the overall relief cap of $80,000, the total personal reliefs allowed to her is capped at $80,000 for YA 2018.
3. There is an increase in tax payable of $797.44 ($900 - $102.56) for Mrs Chua from YA 2017 to YA 2018, due to the relief cap.