1. What is the IRAS Income Tax Formula?

The IRAS (Inland Revenue Authority of Singapore) income tax formula calculates the amount of tax payable based on taxable income, applicable tax rate, and eligible deductions. It provides a straightforward way to estimate your tax liability.

2. How Does the Calculator Work?

The calculator uses the IRAS tax formula:

Where:

• \( Taxable\_income \) — Total taxable income in SGD
• \( Rate \) — Applicable tax rate (decimal)
• \( Deductions \) — Total eligible deductions in SGD

Explanation: The formula multiplies your taxable income by the tax rate and then subtracts any eligible deductions to arrive at your tax payable.

3. Importance of Accurate Tax Calculation

Details: Proper tax calculation ensures you pay the correct amount of tax, avoid penalties for underpayment, and claim all eligible deductions to minimize your tax liability.

4. Using the Calculator

Tips: Enter your taxable income in SGD, the applicable tax rate as a decimal (e.g., 0.15 for 15%), and any eligible deductions in SGD. All values must be non-negative.

5. Frequently Asked Questions (FAQ)

Q1: What counts as taxable income in Singapore?
A: Taxable income includes employment income, business profits, rental income, and other taxable receipts after allowable expenses.

Q2: How are tax rates determined in Singapore?
A: Singapore uses a progressive tax rate system where higher income levels are taxed at higher rates.

Q3: What types of deductions are available?
A: Common deductions include CPF contributions, course fees, donations, and certain business expenses.

Q4: When is income tax due in Singapore?
A: For individuals, tax is typically due by April 15th each year for the preceding year's income.

Q5: Are there tax reliefs available?
A: Yes, Singapore offers various tax reliefs like parent relief, child relief, and earned income relief.