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Income tax on SRS withdrawal
18 Jun 2021 (667 views)

Member:

In the past two decades, I had regularly contributed to the SRS to reduce my tax bracket. Now that I am retired, i would like to know how much i can systematically withdraw from SRS annually without being subjected to IRAS personal income tax.

TKL

Your SRS account is kept with your bank. You can ask the bank to give you the answer to your question.

Member:
I checked with my DBS bank over the phone. They asked me to check with IRAS and IRAS asked me to check with DBS. 
 
When I told DBS this, the operator had to ask the superior and after some time, they said that I can draw out $4000 per year without tax – I don’t believe its so little - 
 
I think this fact is little known and shrouded in mystery  and that’s why I decided to ask you. Maybe they don’t know, because very few people are drawing out their SRS/

TKL
My understanding of the SRS scheme is that 50% of the amount withdrawn is subject to tax. Each person has his or her personal tax situation.

I suppose that the individual can withdraw any amount that you wish (without deduction of tax) and the individual has the obligation to report 50% of the withdrawn amount as taxable income. 

Maybe, the bank will report the amount withdrawn to IRAS and they will automatically 
add that amount as your taxable income.
 
I suggest that you withdraw as much as you need and see what happens at the end of the year when IRAS computes your tax.

Member:
I think if someone does not earn anything,  they can withdraw 40K, and only half of that is subject to tax;   and I know that anyone who earns 20K p.a.  does not have any tax to pay .    
 
That being my hypothesis, I will try to withdraw 40K this year and see what happens. 
 
However, if I suddenly have an income later this year, then I will have to withdraw 40K minus that unexpected income.   I should think this should work. 
 

TKL
Google tells me - Generally, you do not need to pay income tax if you earn gross income of $22,000 or less in a year and do not derive or receive any income in Singapore. 

So, it looks like you can take out $40,000 a year under SRS and pay no tax, if you do not have any other sources of income.


Income tax on SRS withdrawal
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Member:

In the past two decades, I had regularly contributed to the SRS to reduce my tax bracket. Now that I am retired, i would like to know how much i can systematically withdraw from SRS annually without being subjected to IRAS personal income tax.

TKL

Your SRS account is kept with your bank. You can ask the bank to give you the answer to your question.

Member:
I checked with my DBS bank over the phone. They asked me to check with IRAS and IRAS asked me to check with DBS. 
 
When I told DBS this, the operator had to ask the superior and after some time, they said that I can draw out $4000 per year without tax – I don’t believe its so little - 
 
I think this fact is little known and shrouded in mystery  and that’s why I decided to ask you. Maybe they don’t know, because very few people are drawing out their SRS/

TKL
My understanding of the SRS scheme is that 50% of the amount withdrawn is subject to tax. Each person has his or her personal tax situation.

I suppose that the individual can withdraw any amount that you wish (without deduction of tax) and the individual has the obligation to report 50% of the withdrawn amount as taxable income. 

Maybe, the bank will report the amount withdrawn to IRAS and they will automatically 
add that amount as your taxable income.
 
I suggest that you withdraw as much as you need and see what happens at the end of the year when IRAS computes your tax.

Member:
I think if someone does not earn anything,  they can withdraw 40K, and only half of that is subject to tax;   and I know that anyone who earns 20K p.a.  does not have any tax to pay .    
 
That being my hypothesis, I will try to withdraw 40K this year and see what happens. 
 
However, if I suddenly have an income later this year, then I will have to withdraw 40K minus that unexpected income.   I should think this should work. 
 

TKL
Google tells me - Generally, you do not need to pay income tax if you earn gross income of $22,000 or less in a year and do not derive or receive any income in Singapore. 

So, it looks like you can take out $40,000 a year under SRS and pay no tax, if you do not have any other sources of income.