Tax on SRS withdrawal

You can withdraw funds from your SRS account any time. Withdrawals can be made:

     a) in cash;

     b) in the form of investments (effective 1 Jul 2015).

When you withdraw money or investment from your SRS Account, the withdrawal is subject to tax. The taxable amount of the withdrawal will be added to your other taxable income (e.g. employment, rental) and taxed based on the prevailing tax rate. The time of withdrawal and circumstances determine the taxable amount of the withdrawal.

 

Determining the 10-Year Withdrawal Period

You can make withdrawals from your SRS account over ten 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 is currently at 62.

Date of birth of SRS member A is on 1 Mar 1954.  He started his first penalty-free withdrawal on 1 Apr 2016 (at age 62). The prescribed retirement age prevailing at the time of his first SRS contribution is 62 years old. He can spread his withdrawals until he reaches the age of 72 as follows:

Year

Period

Age as of 31 Mar

1

1 Apr 2016 to 31 Mar 2017

63

2

1 Apr 2017 to 31 Mar 2018

64

3

1 Apr 2018 to 31 Mar 2019

65

4

1 Apr 2019 to 31 Mar 2020

66

5

1 Apr 2020 to 31 Mar 2021

67

6

1 Apr 2021 to 31 Mar 2022

68

7

1 Apr 2022 to 31 Mar 2023

69

8

1 Apr 2023 to 31 Mar 2024

70

9

1 Apr 2024 to 31 Mar 2025

71

10

1 Apr 2025 to 31 Mar 2026*

72

*31 Mar 2026 marks the end of his withdrawal period.

Date of birth of SRS member B is on 1 Mar 1952.  He started his first penalty-free withdrawal on 1 Apr 2016 (at age 64). The prescribed retirement age prevailing at the time of his first SRS contribution is 62 years old. He can spread his withdrawals until he reaches the age of 74 as follows:

Year

Period

Age as of 31 Mar

1

1 Apr 2016 to 31 Mar 2017

65

2

1 Apr 2017 to 31 Mar 2018

66

3

1 Apr 2018 to 31 Mar 2019

67

4

1 Apr 2019 to 31 Mar 2020

68

5

1 Apr 2020 to 31 Mar 2021

69

6

1 Apr 2021 to 31 Mar 2022

70

7

1 Apr 2022 to 31 Mar 2023

71

8

1 Apr 2023 to 31 Mar 2024

72

9

1 Apr 2024 to 31 Mar 2025

73

10

1 Apr 2025 to 31 Mar 2026*

74

*31 Mar 2026 marks the end of his withdrawal period.

Balances in SRS account

The balance in 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 10-year withdrawal period. If the SRS member has insurance policies such as endowment and termed annuities in his SRS account on expiry of the 10-year withdrawal period, he does not need to close his SRS account or surrender his insurance policies. The value of the insurance policies (i.e. surrender values as determined by the insurance companies) together with cash and market value of other investments in the SRS account will be deemed withdrawn.

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 10-year 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.

Balance in SRS account After Deemed Withdrawal has applied

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 the future.

Types of Withdrawals

 Type of withdrawalAmount subject to tax5% penalty imposed?
Penalty-Free withdrawal

Withdrawal on or after prescribed retirement age

(withdrawal can be spread over 10 years from the date of first penalty-free withdrawal)

50% of withdrawal sum

No
Withdrawal in the form of annuities50% of annual streamNo

Withdrawal on medical ground

(e.g. physical/mental incapacity and partial withdrawal on grounds of terminal illness)

50% of withdrawal sum

No

Withdrawal in full on terminal illness

50% of full withdrawal sum less exemption*

No

In the event of bankruptcy100% of withdrawal sumNo

Withdrawal in one lump sum by a foreigner (excluding PR)

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 date of withdrawal.

50% of lump sum

No
Other WithdrawalsEarly withdrawals before retirement age100% of withdrawal sum Yes

*From Year of Assessment 2016, a specified amount of SRS funds withdrawn in full on the grounds of terminal illness would be exempt from tax.

 

Withdrawal After Retirement

50% of the amount withdrawn is taxable. 

Spreading out your withdrawals will generally result in greater tax savings.

Date of birth of SRS member C is on 1 Mar 1953.  He has no taxable income (e.g. employment, rental) from age 63. He started his first penalty-free withdrawal on 1 Apr 2016 (at age 63) and the amount standing in his SRS account is $400,000. He withdraws his SRS monies on 1 Apr every year. The prescribed retirement age prevailing at the time of his first SRS contribution is 62 years old.

SRS member C withdraws $40,000 per year. 

Only 50% (i.e. $20,000) of the withdrawal amount is regarded as taxable income. Taking YA 2017 as an example, no tax will be paid as the tax rate is zero for the first $20,000 of the individual's chargeable income.

YA

Age

Withdrawal Amount

Withdrawal Amount subject to tax (50%)

Tax Payable

2017

63

$40,000

$20,000$0 

2018

64

$40,000

$20,000 $0

2019

65

$40,000

$20,000 $0

2020

66

$40,000

$20,000 $0

2021

67

$40,000

$20,000 $0

2022

68

$40,000

$20,000$0 

2023

69

$40,000

$20,000$0

2024

70

$40,000

$20,000$0 

2025

71

$40,000

$20,000$0

2026

72

$40,000

$20,000$0

 

Early Withdrawal (Before Retirement)

100% of the sum withdrawn will be taxed.

A 5% penalty will be imposed.

SRS operator will complete Form PMP (197B) to account for the penalty on premature withdrawal by Singapore citizens and Form IR37B (82KB) for SPRs and foreigners.

Date of birth of SRS member D is on 1 Mar 1954. He has no taxable income (e.g. employment, rental) from age 60. He withdraws his SRS monies on 1 Apr every year starting from 1 Apr 2015 at age 61. The amount standing in his SRS account is $400,000. The prescribed retirement age prevailing at the time of his first SRS contribution is 62 years old. 

YA

Age

Withdrawal Amount

Withdrawal Amount subject to tax (50%)

Penalty (5%)#

2017

61

$40,000

$40,000*$2000

2018

62

$40,000

$20,000^$0

2019

63

$40,000

$20,000^$0

2020

64

$40,000

$20,000^$0

2021

65

$40,000

$20,000^$0

2022

66

$40,000

$20,000^$0

2023

67

$40,000

$20,000^$0

2024

68

$40,000

$20,000^$0

2025

69

$40,000

$20,000^$0

2026

70

$20,000

$10,000^$0

2027

71

$20,000

$10,000^$0

 

  • As it is a premature withdrawal, 100% of the amount withdrawn is taxable. In addition, a 5% penalty is applicable.

^Only 50% of the withdrawal amount is regarded as taxable income as he withdrew the amount after attaining the age of 62 years.

#10 year penalty-free retirement withdrawal period starts from age 62 (i.e. YA 2018 to YA 2027).

Withdrawal in the form of Annuities

50% of the annual stream is subject to tax when the SRS account is closed or deemed closed. SRS account is deemed closed at the end of the 10th year of the withdrawal period.

Withdrawal on Medical Grounds (e.g. physical/mental incapacity and partial withdrawal on grounds of terminal illness)

50% of the amount withdrawn is subject to tax.

The penalty for early withdrawal does not apply.

For withdrawal on medical grounds, you must be physically/mentally incapacitated from ever continuing in any employment or suffering from terminal illness.

You need to submit  Application for Penalty-Free Premature Withdrawal of Funds from SRS Account on Medical Grounds  (76KB)

Withdrawal in Full on Terminal Illness and Deemed Withdrawal Upon Death

Currently, an SRS member can withdraw up to $40,000 per year# from his SRS account tax-free on or after reaching age 62, if he has no other taxable income and relief. Over the 10-year withdrawal period, he can withdraw up to $400,000 ($40,000 p.a. X 10 years) tax-free. However, if an SRS member made a full withdrawal on the grounds of terminal illness or passes away before completing his SRS withdrawals, he would not be able to enjoy the full benefit from spreading out his SRS withdrawals over a 10-year period.

Hence, from Year of Assessment 2016, a tax exemption of up to $400,000 would be granted for SRS funds withdrawn in full on the grounds of terminal illness or deemed withdrawn upon an SRS member's demise. This is to ensure that SRS members are not unduly disadvantaged due to terminal illness or death.

SRS members who have not started the 10-year withdrawal period will enjoy the full tax exemption of $400,000. Otherwise, the amount of full withdrawal or deemed withdrawal that is exempt, will be adjusted based on the prior withdrawals made, including the number of years remaining in the ten-year withdrawal period.

50% of any remaining amount of such a full withdrawal or deemed withdrawal would then be subject to tax i.e. 50% of {Full amount withdrawn or amount deemed withdrawn on death - [Amount Exempt from Tax - Amount Withdrawn on medical/retirement ground in year of full withdrawal/death (capped at $40,000)]} is subject to tax.

#the amount withdrawn subject to tax is 50% of $40,000 which is $20,000. The tax payable on first $20,000 of chargeable income is Nil.

The SRS operator needs to submit Notification to IRAS of Full Withdrawal of Funds from SRS on Grounds of Terminal Illness (48KB)

SRS member, Mr Tan, is 64 year old and has $300,000 savings in his SRS account. In year 2016, he made his first penalty-free SRS withdrawal which is a full withdrawal of all the funds (i.e. $300,000) standing in the SRS account on the ground that he is suffering from a terminal illness. The tax treatment of his SRS withdrawal is as follows:

50% X {Full Amount Withdrawn - [Amount Exempt from Tax - Amount Withdrawn on medical ground / retirement in year of full withdrawal (capped at $40,000)]}

As Mr Tan has not made any penalty-free withdrawal on grounds of retirement or partial withdrawal on medical grounds prior to this withdrawal in full on terminal illness, the amount that is exempted from tax is $400,000 ($40,000 X 10 years).

Since the full amount withdrawn of $300,000 is less than the exemption threshold of $400,000, the full amount withdrawn $300,000 is not taxable.

SRS member, Mr Lim, who is 53 years old, made his first penalty-free withdrawal of $30,000 from his SRS account on medical ground in year 2015. In year 2016, he made a full withdrawal of all funds standing in his SRS account i.e. $400,000 on the ground that he is suffering from a terminal illness.

The tax treatments of his SRS withdrawals are:

Medical ground (not full withdrawal) for Year of Assessment 2016
50% X $30,000 i.e. $15,000 is subject to tax

Tax on first $20,000 of chargeable income is Nil. Assume that he has no other income, no tax is payable on the amount $30,000 withdrawn.

Medical ground (Full Withdrawal on Terminal Illness) for Year of Assessment 2017
50% X {Full Amount Withdrawn - [Amount Exempt from Tax - Amount Withdrawn on medical/retirement ground in year of full withdrawal (capped at $40,000)]}

Full Amount Withdrawn $400,000
Less: Amount Exempted from Tax*$360,000 
Less: Amount Withdrawn on medical/retirement ground in year of full withdrawalNIL($360,000)
Net Amount $40,000
50% of the Net Amount is subject to tax $20,000 ($40,000 x 50%)

*Mr Lim first commenced his 10-year penalty-free withdrawal period in calendar year 2015. For subsequent penalty-free withdrawals after 2015, he is able to make such withdrawals (of up to $40,000 p.a. tax-free if he has no other income) from 2016 to 2024 i.e. 9 remaining years of the 10-year withdrawal period. Thus, the withdrawn amount that is exempted from tax is $360,000 ($40,000 X 9 years).

SRS member, Mr Wong, who is 59 years old, made his first penalty-free withdrawal of $50,000 from his SRS account on medical ground in Aug 2016. In Dec 2016, he made a full withdrawal of all funds standing in his SRS account, i.e. $400,000, on the ground that he is suffering from a terminal illness.

The tax treatments of his SRS withdrawals are:

Medical ground (not full withdrawal) for Year of Assessment 2017
50% X $50,000 i.e. $25,000 is subject to tax

Medical ground (Full Withdrawal on Terminal Illness) for Year of Assessment 2017
50% X {Full Amount Withdrawn - [Amount Exempt from Tax - Amount Withdrawn on medical/retirement ground in year of full withdrawal (capped at $40,000)]}

Full Amount Withdrawn $400,000
Less: Amount Exempted from Tax*$400,000 
Less: Amount Withdrawn on medical/retirement ground in year of full withdrawal^($40,000)($360,000)
Net Amount $40,000
50% of the Net Amount is subject to tax $20,000 ($40,000 x 50%)

*As Mr Wong has not made any penalty-free withdrawal on grounds of retirement or partial withdrawal on medical grounds in the years prior to year of withdrawal in full on terminal illness, the amount exempted from tax is $400,000 ($40,000 X 10 years).

^ Amount Withdrawn on medical/retirement ground in year of full withdrawal is capped at $40,000.

Total amount withdrawn subject to tax for Year of Assessment 2017 is $25,000 + $20,000 = $45,000.

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.

SRS member, Mr Koh, was 45 years old and had $200,000 savings in his SRS account when he passed away on 8 Jan 2016. He has not made any penalty-free withdrawal on medical ground before his death. The tax treatment of his deemed SRS withdrawn amount of $200,000 on his death is:

50% X {Amount Treated as Withdrawn on Death - [Amount exempt - Amount Withdrawn on medical ground / retirement in year of full withdrawal (capped at $40,000)]}

As Mr Koh has not made penalty-free withdrawal on medical ground during the years prior to his death, the amount that is exempted from tax is $400,000 ($40,000 X 10 years).

Since the amount of $200,000 deemed as withdrawn is less than the exemption threshold of $400,000, the full amount of $200,000 deemed as withdrawn on death is not taxable.

SRS member, Mark, who was 66 years old, made his first penalty-free withdrawal of $40,000 from his SRS account after reaching prescribed retirement age 62 in the year 2014. He did not make any withdrawal in year 2015 as he has employment income of $50,000 from teaching part-time. He passed away on 1 Aug 2016 and amount standing in his SRS account treated as withdrawn on his death is $360,000.   

The tax treatments of his SRS withdrawals are:

Withdrawal on grounds of Retirement for Year of Assessment 2015
50% X $40,000 i.e. $20,000 is subject to tax

Tax on first $20,000 of chargeable income is Nil. Assume that he has no other income, no tax is payable on the amount $40,000 withdrawn.

Deemed Withdrawal Upon Death for Year of Assessment 2017
50% X {Amount Treated as Withdrawn - [Amount exempt from tax - Amount Withdrawn on medical ground / retirement in year of full withdrawal (capped at $40,000)]}

Full Amount Withdrawn $360,000
Less: Amount Exempted from Tax*$320,000 
Less: Amount Withdrawn on medical/retirement ground in year of full withdrawal NIL($320,000)
Net Amount $40,000
50% of the Net Amount is subject to tax $20,000 ($40,000 x 50%)

*Mark first commenced his 10-year penalty-free withdrawal period in calendar year 2014. For subsequent penalty-free withdrawals after year 2014, he could make such withdrawals (of up to $40,000 p.a. tax-free if he has no other income) from 2015 to 2023. When he passed away on 1 Aug 2016, he had eight remaining years of the 10-year penalty-free withdrawal period, i.e. 2016 to 2023. The withdrawn amount that is exempted from tax is $320,000 ($40,000 X 8 years)

The administrator/executor of the deceased needs to submit  Notification to IRAS of the Death of the Supplementary Retirement Scheme (SRS) Member and Application for Withdrawal from SRS Account (104KB).

Withdrawal in the event of Bankruptcy

100% of the amount withdrawn is subject to tax. 

The penalty for early withdrawal does not apply.

The SRS operator needs to submit Application for Penalty-Free Premature Withdrawal of Funds from SRS Account upon Bankruptcy (78KB).

Withdrawal of Lump Sum by a Foreigner (10-year parking period)

50% of the amount fully withdrawn is subject to tax. The penalty for early withdrawal does not apply.

To enjoy this concession, the foreigner must withdraw all the funds standing in his SRS account.

Foreigner does not include Permanent Residents.

You must have maintained the SRS account for at least ten years from the date of the first contribution and have been a non-Singaporean for a continuous period of ten years before the date of withdrawal.

SRS Withdrawals in the Form of Investments

From 1 Jul 2015, SRS members who meet the qualifying conditions can apply to their SRS operators to withdraw investments from their Supplementary Retirement Scheme (SRS) accounts without having to liquidate their investments. This is applicable for the following types of withdrawals, which qualify for the 50% tax concession:

a.  withdrawal on or after the statutory retirement age prevailing at the time of an SRS member's first contribution (prescribed retirement age);
b.  withdrawal on medical grounds;
c.  withdrawal in full by a foreigner who has maintained his SRS account for at least 10 years from the date of his first contribution; and
d.  actual withdrawal made by an SRS member or the legal personal representative of a deceased SRS member  from the SRS account, after the SRS investment that is to be withdrawn had earlier been deemed withdrawn upon death or after the expiry of the 10-year withdrawal period.

Please refer to the Ministry of Finance's (MOF) website for more information.

 

Year of Assessment (YA) for Withdrawals

Withdrawals from SRS accounts are subject to tax in the YA following the year of withdrawal.

If you withdraw $6,000 from your SRS account in 2016, either 50% or 100% of the withdrawal amount (depending on the type of withdrawal) will be regarded as part of your income in 2016.

This amount is subject to tax for the YA 2017 based on the tax rate applicable to you.

If you are a non-Singaporean who no longer works and lives in Singapore, you will be taxed as a non-resident when you withdraw the fund from your SRS account.

Reporting Withdrawals

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.

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