The CPF Top-up relief is given to encourage Singaporeans and Permanent Residents to set aside money either to top up in their own CPF Special/Retirement Account or those of family members for basic retirement needs.
On 14 September 2018, the Minister for Finance makes the Income Tax (Maximum Relief Amount for Payments to Retirement Account and Special Account) Rules 2018 and has gazetted as Subsidiary Legislation Supplement.
These Rules set out the maximum relief that can be claimed from Year of Assessment (YA) 2017 onward for the purposes of claiming for deductions for top-up to family’s CPF accounts (under section 39(3) of the Income Tax Act) or deductions for top-up to taxpayer’s CPF account by taxpayer or employer (under section 39(3A) of the Income Tax Act). The maximum relief calculation takes into account payments to both the retirement account and the special account.
A personal income tax relief cap of $80,000 will apply from the Year of Assessment (YA) 2018 to the total amount of all tax reliefs claimed, including any relief on cash top-ups made on or after 1 Jan 2017.
As there is no refund for accepted cash top-up monies, taxpayers who make cash top-ups on or after 1 Jan 2017 must take note of the overall personal income tax relief cap.
Source: Electronic Gazette, 17 September 2018