Tax deduction is available for donations to Institutions of a Public Character (IPCs) in Singapore. According to the recent Budget 2011 announcement, this enhanced tax deduction of 250 per cent is extended for another five years for donations made during the period from 1 Jan 2011 to 31 Dec 2015.

You will benefit from the reduction of your income tax payable, depending upon your income tax rate. Based on tax deduction of 250 percent, for every $100 of tax exempt donation made in 2010, the benefit of your $250 deduction could be:

	If your top marginal tax rate is 20%, you enjoy a tax savings of $50
	If your top marginal tax rate is 8.5%, you enjoy a tax savings of $21.25
	If your top marginal tax rate is 3.5%, you enjoy a tax savings of $8.75

You only benefit from tax deduction if you do indeed pay personal income tax. The Inland Revenue Authority of Singapore (IRAS) has been raising the non-taxable income threshold over the years. It currently stands at S$22,000 per annum. The majority of Singaporeans do not pay income tax.

If you do not benefit from a tax deduction, you do not need to request for a tax exempt receipt.

To receive a tax deduction, you need to inform us that you require it and provide us with your NRIC number. Our regular tax donation form will have a tick box for you to indicate your option.

When you request for tax deduction, we will do two things:

1. We will send you an acknowledgement letter with the tax exempt receipt printed on the lower part of the letter. You should be auto-included (see item 2 below) when you ask for a tax exempt receipt. However, if you do not receive our acknowledgement letter or tax exempt receipt, please inform us.

2. We will notify IRAS of your donation details and the donation deduction will be included automatically in your tax assessment. You do not need to claim tax deduction for your donation in your income tax form if you have requested from us a tax exempt receipt and provided us your NRIC number.

Personal income tax is assessed based on the preceding calendar year.

Thus, if you make a donation in calendar year 2010, you will receive the deduction based on your tax return for the Year of Assessment 2011 (or Y/A 2011) which is usually due to be submitted to IRAS by 15 April 2011.

If we receive a donation by 31 December 2010, we will submit it to IRAS for auto-inclusion in calendar year 2010 for your income tax return for Y/A 2011. However, if we receive your donation after 31 December 2010, say in January 2011, then the donation will be available for deduction only for your tax return for the Y/A 2012.

For more information from IRAS, click here.

* Organisations may contact us directly.