It’s coming to the end of the year. I started calculating my personal income tax payable & felt a little heart pain for my bank account. I chatted with my millionaire mentor on how I could reduce my personal income tax legally.
To start, first determine how much is your chargeable income. I use the personal income tax calculator from IRAS, which is I find it very useful & quick to calculate offline.
Download income tax calculator: https://www.iras.gov.sg/irashome/Quick-Links/Calculators/
As this article is written in 2016, you can download the calculator titled ‘YA2017‘ (for income earned in year 2016).
As our personal income increases, so do the rate of tax chargeable – starting from 2% to 20% of your chargeable income.
Note that earned income & chargeable income is different.
Earned income: Income that we earned. This makes up half the equation of calculating our payable personal income tax.
Chargeable income: Deduct personal reliefs (which you are entitled to) from above …