Singapore legislation
Clause 68
Clause 68
Amendment of Income Tax Act
(1)
Section 39(2) of the Income Tax Act is amended by deleting sub‑paragraphs (ii) and (iia) of paragraph (g) and substituting the following sub‑paragraph:“(ii)the total deductions allowable under this paragraph must not exceed $5,000, except that where the sum of the contributions mentioned in sub‑paragraphs (A) and (B) exceeds $5,000, then the deduction allowed under this paragraph must be that sum:
contributions to any approved pension or provident fund under this paragraph, subject to subsections (6) to (9);
contributions to the Central Provident Fund under this paragraph, subject to subsections (6) to (10);”.
(2)
Section 39(2) of the Income Tax Act is amended by deleting sub‑paragraphs (i) and (ia) of paragraph (h) and substituting the following sub‑paragraph:“(i)where the sum of contributions to any approved pension or provident fund or society under paragraph (g) and this paragraph exceeds $5,000, no deduction must be allowed under paragraph (g) in respect of premiums for life insurance;”.
(3)
Section 39(2) of the Income Tax Act is amended —
by deleting the semi‑colon at the end of paragraph (p) and substituting a full‑stop; and
by deleting paragraph (q).
(4)
Section 39 of the Income Tax Act is amended by deleting subsections (3), (3A) and (3B) and substituting the following subsections:“(3) In the case of an individual resident in Singapore in the year of assessment who, in the year preceding the year of assessment, was a citizen or permanent resident of Singapore and —
has paid money in accordance with section 18 of the Central Provident Fund Act 1953 to the retirement account or special account of the individual’s spouse, sibling, parent, parent‑in‑law, grandparent or grandparent‑in‑law or 2 or more of those accounts; or
has made any voluntary contribution under section 13B of the Central Provident Fund Act 1953 and has directed an amount of such contribution to be paid to the medisave account of the individual’s spouse, sibling, parent, parent‑in‑law, grandparent or grandparent‑in‑law or 2 or more of those accounts (called in this subsection and subsection (3AA) a medisave contribution),there is to be allowed for that year of assessment a deduction of the lower of the following amounts:
the sum of —
the amount of the payment to a retirement account or a special account mentioned in paragraph (a) or (as the case may be) the total amount of all such payments, subject to the applicable maximum relief amount prescribed by rules made under section 7 for that year of assessment; and
the amount of the medisave contribution mentioned in paragraph (b) or (as the case may be) the total amount of all such medisave contributions, subject to the applicable maximum relief amount prescribed by rules made under section 7 for that year of assessment;
the deduction limit for the year of assessment prescribed by rules made under section 7.(3AA) Subsection (3)(c) excludes a payment or medisave contribution mentioned in subsection (3)(a) or (b) (as the case may be) to the individual’s spouse’s or sibling’s retirement account, special account or medisave account if —
at the time the payment or medisave contribution was made, that spouse or sibling was not incapacitated by reason of physical or mental infirmity; and
that spouse’s or sibling’s income exceeds $4,000 in the year preceding the year in which the payment or medisave contribution was made.(3A) In the case of an individual resident in Singapore in the year of assessment who, in the year preceding the year of assessment, was a citizen or permanent resident of Singapore and who, or whose employer on his or her behalf, has —
in the year preceding the year of assessment paid money to the individual’s retirement account or special account in accordance with section 18 of the Central Provident Fund Act 1953; or
in the year preceding the year of assessment made a voluntary contribution under section 13B of the Central Provident Fund Act 1953 and has directed an amount of such contribution to be paid to the individual’s medisave account, excluding such amount of contribution allowed a deduction under section 39(2)(h) (called in this subsection a medisave self‑contribution),there is to be allowed for that year of assessment a deduction of the lower of the following amounts:
the sum of —
the amount of the payment to the retirement account or special account mentioned in paragraph (a) or (as the case may be) the total amount of all such payments, subject to the applicable maximum relief amount prescribed by rules made under section 7 for that year of assessment; and
the amount of the medisave self‑contribution mentioned in paragraph (b) or (as the case may be) the total amount of all such medisave self‑contributions, subject to the applicable maximum relief amount prescribed by rules made under section 7 for that year of assessment;
the deduction limit for that year of assessment prescribed by rules made under section 7.(3B) The rules mentioned in subsections (3) and (3A) may —
prescribe different maximum relief amounts for —
different individuals or classes of individuals; and
contributions to the retirement account, the special account or the medisave account;
prescribe different deduction limits for the purposes of subsections (3) and (3A); (c)provide for the manner of computation of such applicable maximum relief amounts and deduction limits; and
take effect from (and including) the year of assessment 2023 or a later year of assessment.”.
(5)
Subsections (1) to (4) have effect for the year of assessment 2023 and subsequent years of assessment.