If I Have Already Declared Income From Investments Would I Have to Pay Tax Again When I Withdraw
You may withdraw funds from your SRS business relationship any time. Withdrawals can be made:
- in cash;
- in the course of investments for the qualifying types of withdrawal.
Withdrawals in the form of monies or investment from your SRS Business relationship are subject to income revenue enhancement and added to your other taxable income (e.k. employment, rental). It will exist taxed based on the prevailing tax rate. The time and circumstances of the withdrawal determine the taxable amount of the withdrawal.
When a greenhorn or Singapore Permanent Resident withdraws from his SRS account, the withdrawal is subject to withholding tax.
On this page:
10-year withdrawal catamenia
You may make penalty-free withdrawals from your SRS accountover ten years starting from the appointment of your start penalization-free withdrawal.
Withdrawals are penalization-free only if they take place on or after the statutory retirement age (currently at 62) that was prevailing at the fourth dimension of your first SRS contribution (i.due east. prescribed retirement age). If you take already opened an SRS account and made your showtime contribution, any subsequent change in the statutory retirement historic period (due east.g. upwards to age 65) will not bear upon you (i.eastward. you may still begin your first penalty-free SRS withdrawal when you lot attain age 62).
Withdrawals from SRS accounts are subject area to revenue enhancement in the Year of Assessment post-obit the year of withdrawal. Y'all need not declare the withdrawal in your Income Revenue enhancement Render as it will be included in your tax assessment based on information provided past the SRS operator. The amount is field of study to tax based on the tax charge per unit applicable to you. If you are a non-Singaporean who no longer works and lives in Singapore, you lot volition exist taxed as a non-resident when you withdraw the fund from your SRS business relationship.
As the tax benefits under the SRS are given to incentivise saving for retirement, withdrawals fabricated before the prescribed retirement historic period may result in penalties being imposed in most circumstances except those made under exceptional circumstances every bit follows:
- Expiry
- Medical Grounds
- Bankruptcy; and
- Full withdrawal of the SRS balance by a foreigner (bailiwick to atmospheric condition).
Example 1: Commencement withdrawal at statutory retirement age
SRS member A started his first penalisation-free withdrawal on 1 Apr 2021 (at age 62). The statutory retirement historic period prevailing at the fourth dimension of his first SRS contribution was 62. He may spread his withdrawals until 31 Mar 2031 as follows:
| Yr | Period |
|---|---|
| ane | one Apr 2021 to 31 Mar 2022 |
| two | i April 2022 to 31 Mar 2023 |
| three | i April 2023 to 31 Mar 2024 |
| 4 | 1 Apr 2024 to 31 Mar 2025 |
| five | 1 Apr 2025 to 31 Mar 2026 |
| half-dozen | 1 Apr 2026 to 31 Mar 2027 |
| seven | i Apr 2027 to 31 Mar 2028 |
| 8 | one Apr 2028 to 31 Mar 2029 |
| ix | 1 Apr 2029 to 31 Mar 2030 |
| 10 | i Apr 2030 to 31 Mar 2031* |
* 31 Mar 2031 marks the end of his withdrawal period.
Balance in SRS business relationship
The balance in your SRS account is fabricated up of your SRS contribution and investment returns accumulated over the years.
The corporeality (except for life annuities) in the SRS account will be deemed to be withdrawn immediately after the end of the ten-year withdrawal menstruation. If the SRS fellow member has insurance policies such as endowment policies and term annuities in his SRS account at the cease of the 10-year withdrawal period, he does not need to close his SRS account or surrender his insurance policies. The value of the insurance policies (i.east. based on the surrender values adamant by the insurance companies) together with the cash and market place value of other investments in the SRS account will exist deemed to be withdrawn.
The SRS operator will study fifty% of such balance to IRAS and this is subject to tax in the post-obit year.
For investments in life annuities, the 10-twelvemonth withdrawal menstruum does non apply. So long as you go along to receive your annuity payments for life, l% of the annuity payments will be subject area to tax each twelvemonth.
Residuum in SRS account after deemed withdrawal
You may withdraw the residuum from the SRS account at the end of the withdrawal menses.
If yous choose not to withdraw the remainder but to get out the balance with the SRS operator, time to come returns from the investments volition be discipline to the same taxation treatment as any other investments.
Types of withdrawals
| Type of withdrawal | Amount subject to revenue enhancement | 5% punishment imposed? | |
|---|---|---|---|
| Punishment-free withdrawal | Withdrawal on or later on prescribed retirement age (withdrawal tin can be spread over x years from the engagement of first penalty-free withdrawal) | 50% of withdrawal sum | No |
| Withdrawal on medical ground (physical or mental incapacity; partial withdrawal on grounds of final illness) | fifty% of withdrawal sum | No | |
| Withdrawal in full due to terminal illness | l% of full withdrawal sum less an exempt corporeality of upwards to $400,000 | No | |
| In the issue of bankruptcy | 100% of withdrawal sum | No | |
| Withdrawal in one lump sum by a greenhorn (with at least 10 years property period) | 50% of lump sum | No | |
| Other withdrawals | Early withdrawals before prescribed retirement historic period | 100% of withdrawal sum | Aye |
Withdrawal on or after prescribed retirement age
To encourage individuals to withdraw their SRS savings at age 62 (the current statutory retirement age) or later, the Government grants a 50% taxation concession for such withdrawals (i.e. only fifty% of the withdrawal is subject to tax). Such withdrawals also do not attract a five% penalization.
Spreading out your withdrawals will generally result in greater tax savings.
Case 2: Withdrawal on or after prescribed retirement age
The date of birth of SRS member B is on 1 Mar 1958. He has no taxable income (e.g. employment, rental) from historic period 63. He made his outset penalization-complimentary withdrawal on 1 Apr 2021 (at age 63) and the amount standing in his SRS account was $400,000. He withdraws his SRS monies on one Apr every year. The statutory retirement age prevailing at the fourth dimension of his outset SRS contribution was 62 years old.
SRS member B withdraws $xl,000 per year.
Simply 50% (i.due east. $20,000) of the yearly withdrawal amount is regarded every bit taxable income. Taking Year of Assessment (YA) 2022 every bit an example, no tax needs to be paid as the tax rate is zero for the offset $20,000 of the individual's chargeable income.
| YA | Withdrawal amount | Withdrawal corporeality subject to tax (50%) | Tax payable |
|---|---|---|---|
| 2022 | $40,000 | $twenty,000 | $0 |
| 2023 | $forty,000 | $20,000 | $0 |
| 2024 | $twoscore,000 | $20,000 | $0 |
| 2025 | $40,000 | $xx,000 | $0 |
| 2026 | $twoscore,000 | $xx,000 | $0 |
| 2027 | $40,000 | $xx,000 | $0 |
| 2028 | $40,000 | $20,000 | $0 |
| 2029 | $forty,000 | $twenty,000 | $0 |
| 2030 | $xl,000 | $xx,000 | $0 |
| 2031 | $40,000 | $xx,000 | $0 |
Withdrawal on medical grounds (due east.chiliad. physical/mental incapacity and partial withdrawal on grounds of terminal illness)
If yous are physically or mentally incapacitated and not able to continue in any employment or yous have a terminal illness, you may withdraw your SRS savings at whatever time. 50% of the amount withdrawn is subject to tax. The penalization for early withdrawal does not apply.
You and the qualified medical practitioner currently registered under the Medical Registration Human activity are required to complete the Application for Penalty-Free Premature Withdrawal of Funds from SRS Account on Medical Grounds (Md, 76KB).
Withdrawal in full on last illness and deemed withdrawal on expiry
Currently, an SRS fellow member can withdraw up to $40,000 per year# from his SRS account tax-complimentary on or later reaching historic period 62, if he has no other taxable income and relief. Over the x-twelvemonth withdrawal flow, he can withdraw up to $400,000 ($40,000 per year x x years) tax-gratuitous. Even so, if an SRS fellow member fabricated a full withdrawal on the grounds of terminal affliction or passes abroad before completing his SRS withdrawals, he would not be able to savour the full benefit from spreading out his SRS withdrawals over a 10-yr period.
Hence, from Year of Cess 2016, a tax exemption of up to $400,000 would be granted for SRS funds withdrawn in full on the grounds of last illness or deemed withdrawn upon an SRS member'southward demise. This is to ensure that SRS members are not unduly disadvantaged due to concluding illness or decease.
If an SRS member passes away, whatsoever sum continuing in his SRS account shall exist accounted to exist withdrawn on the date of his death.
SRS members who accept not started the 10-year withdrawal period will enjoy the total tax exemption of $400,000.
Otherwise, the exemption amount will be adjusted based on the prior withdrawals fabricated, and the number of years remaining in the 10-yr withdrawal flow.
50% of any remaining amount of such a total or deemed withdrawal would so be bailiwick to tax i.eastward. 50% of {full or accounted corporeality withdrawn on death - [amount exempt from tax or adjusted exemption amount - corporeality withdrawn on medical/retirement ground in year of total withdrawal/death (capped at $40,000)]} is subject to taxation.
# the amount withdrawn subject to tax is l% of $twoscore,000 which is $twenty,000. The tax payable on first $20,000 of chargeable income is Nil.
The SRS operator needs to submit the Notification to IRAS of Full Withdrawal of Funds from SRS on Grounds of Final Illness (DOCX, 48KB).
Example iii: Ciphering for full withdrawal on terminal illness (no prior penalty-costless withdrawal)
SRS member, Mr Tan has $300,000 savings in his SRS account. In 2021, he made his first penalty-gratis SRS withdrawal, which is a full withdrawal of all the funds (i.e. $300,000) standing in the SRS account, on the grounds that he has a terminal illness. The revenue enhancement treatment of his SRS withdrawal is as follows:
l% x {full withdrawal amount - [corporeality exempt from tax - any withdrawal on medical/retirement grounds in 2021 (capped at $40,000)]}
As Mr Tan has non made whatsoever penalty-free withdrawal on grounds of retirement or fractional withdrawal on medical grounds prior to this withdrawal in full on terminal affliction, the amount that is exempted from taxation is $400,000 ($40,000 x 10 years).
Since the amount of $300,000 withdrawn is less than the exemption threshold of $400,000, the full amount is not taxable.
Example 4: Computation for full withdrawal on terminal disease (with a prior penalty-free withdrawal in the by year)
SRS member, Mr Lim made his first penalty-free withdrawal of $30,000 from his SRS account on medical footing in 2020. In 2021, he fabricated a full withdrawal of all funds standing in his SRS business relationship (i.e. $400,000), on the grounds that he has a terminal illness.
The tax treatments of his SRS withdrawals are:
Medical ground (not full withdrawal) for Year of Assessment 2021
50% x $30,000 (i.e. $15,000) is subject to tax
Revenue enhancement on commencement $xx,000 of chargeable income is Nil. Assume that he has no other income, no tax is payable on the corporeality $thirty,000 withdrawn.
Medical footing (full withdrawal on terminal illness) for Year of Assessment 2022
fifty% x {full withdrawal amount - [adjusted exemption amount - any withdrawal on medical/retirement grounds in 2021 (capped at $xl,000)]}
| Full amount withdrawn | $400,000 | |
|---|---|---|
| Less: Adjusted exemption corporeality* | $360,000 | |
| Less: Amount withdrawn on medical/retirement ground in year of total withdrawal | NIL | ($360,000) |
| Net corporeality | $40,000 | |
| 50% of the internet amount is subject to tax | $20,000 ($xl,000 x l%) |
* Mr Lim beginning commenced his x-year penalty-free withdrawal period in agenda year 2020. For subsequent penalty-costless withdrawals after 2020, he is able to make such withdrawals (of upwardly to $40,000 per annum tax-free if he has no other income) from 2021 to 2029 i.e. 9 remaining years of the ten-year withdrawal period. Thus, adjusted corporeality that is exempt from tax is $360,000 ($40,000 10 9 years).
Example 5: Computation for full withdrawal on terminal illness (with a prior penalty-gratuitous withdrawal in the current twelvemonth)
SRS member, Mr Wong made his first penalty-free withdrawal of $50,000 from his SRS business relationship on medical ground in Aug 2021. In Dec 2021, he made a full withdrawal of all funds continuing in his SRS account (i.e. $400,000) on the ground that he has a terminal illness.
The tax treatments of his SRS withdrawals are:
Medical ground (not full withdrawal) for Year of Assessment 2022
50% x $l,000 i.e. $25,000 is subject area to tax
Medical ground (full withdrawal on terminal illness) for Year of Assessment 2022
50% ten {full withdrawal amount - [amount exempted from tax - whatever withdrawal on medical/retirement grounds in 2021 (capped at $xl,000)]}
| Total corporeality withdrawn | $400,000 | |
|---|---|---|
| Less: Amount exempted from tax* | $400,000 | |
| Less: Amount withdrawn on medical/retirement footing in 2021 (capped at $40,000) | ($twoscore,000) | ($360,000) |
| Internet amount | $40,000 | |
| 50% of the net amount is field of study to tax | $20,000 ($40,000 x l%) |
* As Mr Wong has not made whatever penalty-free withdrawal on grounds of retirement or partial withdrawal on medical grounds in the years prior to twelvemonth of withdrawal in full on terminal illness, the amount exempt from tax is $400,000 ($40,000 x ten years).
Full amount withdrawn discipline to taxation for Year of Assessment 2022 is $25,000 + $20,000 = $45,000.
Example 6: Computation for deemed withdrawal on decease (no prior penalisation-free withdrawal)
SRS member, Mr Koh had $200,000 savings in his SRS account when he passed abroad on 8 Jan 2021. He had not fabricated whatever penalization-complimentary withdrawal on medical basis earlier his death. The tax treatment of his deemed withdrawal amount of $200,000 on his death is:
l% 10 {full withdrawal amount - [amount exempted from tax - any withdrawal on medical/retirement grounds in 2021 (capped at $twoscore,000)]}
As Mr Koh has not made penalisation-gratis withdrawal on medical grounds prior to his expiry, the corporeality that is exempt from revenue enhancement is $400,000 ($40,000 ten 10 years).
Since the deemed withdrawal corporeality of $200,000 is less than the exemption threshold of $400,000, the total amount is non taxable.
Instance 7: Computation for deemed withdrawal on death (with prior penalty-free withdrawal)
SRS member, Mark made his first penalty-complimentary withdrawal of $40,000 from his SRS account afterward reaching prescribed retirement age of 62 in 2019. He did non make any withdrawal in 2020 as he has employment income of $50,000 from education part-time. He passed away on 1 Aug 2021 and amount standing in his SRS account deemed to exist withdrawn on his death is $360,000.
The taxation treatments of his SRS withdrawals are:
Withdrawal on grounds of retirement for Yr of Assessment 2020
50% x $40,000 (i.e. $20,000) is field of study to revenue enhancement
Tax on start $20,000 of chargeable income is Nil. Presume that he has no other income, no taxation is payable on the amount $xl,000 withdrawn.
Deemed withdrawal upon decease for Year of Cess 2022
50% x {amount deemed withdrawn - [adjusted exemption corporeality - amount withdrawn on medical basis/retirement in 2021 (capped at $40,000)]}
| Full amount withdrawn | $360,000 | |
|---|---|---|
| Less: Adjusted exemption corporeality* | $320,000 | |
| Less: Amount withdrawn on medical/retirement ground in 2021 | NIL | ($320,000) |
| Cyberspace amount | $40,000 | |
| fifty% of the net amount is subject to taxation | $20,000 ($twoscore,000 x 50%) |
* Mark commenced his 10-twelvemonth withdrawal catamenia in 2019. When he passed away on ane Aug 2021, he had 8 remaining years of the 10-year withdrawal menses (i.eastward. 2021 to 2028). The adjusted exemption amount is $320,000 ($40,000 10 8 years).
Withdrawal in the event of defalcation
You lot may utilize to withdraw your SRS savings on grounds of bankruptcy if you are bankrupt. 100% of the amount withdrawn is subject to tax. The penalty for early withdrawal does not apply.
The SRS operator needs to submit the Application for Penalty-Gratuitous Premature Withdrawal of Funds from SRS Account upon Bankruptcy (PDF, 78KB).
Withdrawal of lump sum by a foreigner (with at least x-years holding catamenia)
If you are a foreigner, you lot may apply to withdraw your SRS savings without penalty and have 50% of the corporeality fully withdrawn subject to tax if y'all:
- are neither a Singapore Citizen nor a Singapore Permanent Resident on the appointment of withdrawal and for a continuous menses of x years preceding the date of withdrawal; and
- have maintained your SRS account for at least 10 years from the date of your start SRS contribution; and
- make a one-time total withdrawal from your SRS business relationship.
Withdrawal before prescribed retirement age
You may withdraw your SRS savings anytime, although early withdrawals are fully subject to tax and attract a 5% penalty.
SRS operator will complete Form PMP to account for the penalty on early withdrawal past Singapore Citizens and Form IR37B for Singapore Permanent Residents and foreigners. These forms are available as S45 Offline Information-Entry Import Template.
Instance eight: Early withdrawal
The date of nativity of SRS member C is 1 Mar 1960. He has no taxable income (e.g. employment, rental) from age 60. He withdraws his SRS monies on 1 Apr every yr starting from 1 Apr 2021 at historic period 61. The amount continuing in his SRS account at that time was $400,000. The statutory retirement age prevailing at the time of his offset SRS contribution was 62.
| YA | Age | Withdrawal amount | Withdrawal amount bailiwick to tax (50%) | Penalisation (5%)# |
|---|---|---|---|---|
| 2022 | 61 | $40,000 | $xl,000* | $two,000 |
| 2023 | 62 | $40,000 | $20,000^ | $0 |
| 2024 | 63 | $40,000 | $20,000^ | $0 |
| 2025 | 64 | $40,000 | $20,000^ | $0 |
| 2026 | 65 | $40,000 | $twenty,000^ | $0 |
| 2027 | 66 | $40,000 | $20,000^ | $0 |
| 2028 | 67 | $xl,000 | $20,000^ | $0 |
| 2029 | 68 | $forty,000 | $20,000^ | $0 |
| 2030 | 69 | $40,000 | $xx,000^ | $0 |
| 2031 | lxx | $20,000 | $10,000^ | $0 |
| 2032 | 71 | $20,000 | $10,000^ | $0 |
# 10-yr penalty-free retirement withdrawal menstruum starts from historic period 62 (i.e. YA 2023 to YA 2032).
* As the withdrawal at historic period 61 is an early on withdrawal, 100% of the amount withdrawn is taxable. In addition, a 5% penalisation is applicable.
^ Simply l% of the withdrawal corporeality is regarded every bit taxable income every bit he withdrew the amount after attaining the age of 62 years.
Annuity payments
Before the SRS account is airtight or deemed to exist closed*, annuity payments will be made to the SRS account and volition non be taxed if no SRS withdrawal is made. After the SRS account is closed or deemed closed, 50% of the annuity payments will be subject to tax.
*SRS account is accounted closed at the xth year of the 10-year withdrawal period.
Withdrawals in the class of investments
SRS members who run across the qualifying conditions can apply to their SRS operators to withdraw investments from their SRS accounts without having to liquidate their investments. This is applicative for the post-obit types of punishment-gratuitous withdrawals:
- withdrawal on or after the statutory retirement age prevailing at the time of an SRS member'due south first contribution (prescribed retirement age);
- withdrawal on medical grounds;
- withdrawal in full by a foreigner who has maintained his SRS business relationship for at to the lowest degree 10 years from the appointment of his first contribution; and
- actual withdrawal from an SRS account that is deemed to be closed (e.g. later on the finish of the x-twelvemonth withdrawal period or the death of the SRS fellow member).
You lot may refer to the Ministry building of Finance'due south website for the FAQs on SRS withdrawals and SRS investments.
Withholding tax on SRS withdrawals
There is no withholding tax on SRS withdrawals made by Singaporean account holders.
If a foreigner or Singapore Permanent Resident (SPR) has applied to withdraw cash/investment from his SRS account, 50% or 100% of the withdrawn amount, depending on the type of the withdrawal, will be subject to a withholding tax.
The SRS banking company operator will:
- Withhold an corporeality of revenue enhancement at the prevailing non-resident tax charge per unit of 22% at the bespeak of withdrawal. This amount will exist remitted to IRAS.
- Deduct a 5% penalty on any premature withdrawals. The 5% penalty is not-refundable and is split from the withholding tax.
- Electronically transmit the data on the withdrawal and pay the withholding tax to IRAS.
Example 9: Computation of withholding taxes
Scenario 1:
Mr Chan (a foreigner) made a withdrawal of $300,000 from his SRS account afterwards his retirement age.
Scenario 2:
Mr Tan (an SPR) made a withdrawal of $300,000 from his SRS business relationship before his retirement historic period, which resulted in a 5% penalty imposed.
Concessionary Withholding Taxation Rate
The concessionary withholding tax charge per unit of 15% will apply if the post-obit conditions are met:
- Cumulative amount withdrawn past the foreigner or SPR from his SRS business relationship in the calendar year does non exceed $200,000; and
- The foreigner or SPR does not have any other income as well the SRS withdrawal(s) during the calendar yr when the withdrawal(southward) is/are fabricated.
To savour this concession, the SRS business relationship holder must declare that he fulfills the 2 atmospheric condition in a higher place using the Form IR37B(1). The Form IR37B(1) is available with the SRS operator.
Withholding tax is not the terminal revenue enhancement payable
If the foreigner or SPR is a Singapore revenue enhancement resident, the actual taxation payable on the SRS withdrawal will be based on the progressive resident rates.
For a non-resident, the actual tax payable on the SRS withdrawal will be 15% or the progressive resident rates, whichever is higher.
Applying for a refund
Tax withheld on the SRS withdrawal is a tax credit that volition be used to offset your actual tax liability. Any unused tax credit will be refunded to you.
Please file an Income Tax Render during the e-Filing flow (1 Mar to 18 Apr) in the year following the year of tax withheld, via myTax Portal, for the bodily tax liability to be computed and unused revenue enhancement credits to be refunded.
Example 10: Computation of refund
Assuming the actual tax rate applicable for the SRS withdrawal is finally determined to be 15% and y'all take no other tax liability, the refund you will receive is calculated as follows:
For Foreigners and Singapore Permanent Residents
If yous are leaving your employment and leaving Singapore, and have made withdrawal in the twelvemonth of departure, you must obtain a SRS argument of contributions/withdrawal (for tax clearance) (PDF, 167KB) from the SRS banking concern operator specifically for the purpose of tax clearance.
FAQs
I am a foreigner who started contributing to SRS at the historic period of 55. Will I be allowed to withdraw SRS contribution without penalties, at the age of 62? Do I need to wait for ten years to make a penalty-costless withdrawal?
Any SRS fellow member, regardless of whether he is a foreigner or not, may withdraw his SRS without penalties at the age of 62, if that is the statutory retirement historic period prevailing at the time of his start contribution.
What is the rationale for allowing withdrawal of investment products for the 4 specific types of withdrawal, which qualifies for the 50% tax concession?
This is to allow SRS members to hold their SRS investments outside of the SRS scheme without having to incur the transaction costs to kickoff liquidate their SRS investments (then as to withdraw cash from their SRS accounts) and thereafter re-buy the same investments outside of the SRS scheme.
Can I nominate a beneficiary for my SRS funds?
No. Nosotros practise not have a provision in the SRS allowing for the nomination of a beneficiary of an SRS business relationship. This is because SRS savings are meant for the SRS members' own retirement purposes. However, if the SRS member passes away, the SRS balances volition form part of his estate and will be distributed according to his will or the law (if a will does non exist). In that location will be no 5% penalty on withdrawal and merely fifty% of the sum standing in the SRS business relationship after deducting the corporeality of deemed withdrawal upon expiry that is exempt from taxation will be subject to income taxation.
Please also notation that SRS bank operators may crave the Grant of Probate or Letters of Administration to be produced by the executor or administrator of the estate to ensure that the assets in the SRS are distributed correctly.
Source: https://www.iras.gov.sg/taxes/individual-income-tax/basics-of-individual-income-tax/special-tax-schemes/tax-on-srs-withdrawals
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