SRS account contribution limit keeps scheme simpler
Ms Siew Kang Yoke asked if there can be flexibility to allow more deposits into the Supplementary Retirement Scheme (SRS) account beyond the annual contribution cap. (“More flexibility in Supplementary Retirement Scheme, please”; Feb 4)
Ms Siew Kang Yoke asked if there can be flexibility to allow more deposits into the Supplementary Retirement Scheme (SRS) account beyond the annual contribution cap. (“More flexibility in Supplementary Retirement Scheme, please”; Feb 4)
SRS contributions enjoy tax relief and only 50 per cent of the monies are subject to tax upon withdrawal.
If monies beyond the contribution cap are put into the account, they could be subject to tax upon withdrawal.
This may not be advantageous for account holders.
It would also be administratively complex for agent banks and product providers to account separately for two pools of SRS contributions with different tax statuses, and to attribute investment gains and losses between the two.
Hence, we have kept the scheme simpler for SRS accounts to accept only monies up to the annual cap. It differs from Central Provident Fund, as withdrawals from the CPF are tax-exempt.
We thank Ms Siew for her feedback.
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