Filing income tax returns can be complicated depending upon your current financials. It is time to act smart and avoid these common mistakes while filing your tax returns.

Filing Income Tax Mistake 1:
Not claiming reliefs this year and assuming that claims are included automatically in future assessments.

If you choose paper-filing method, you are required to file claims every year irrespective of any changes in the claim amount.

For e-filing, your claims are listed under Income, Deductions and Relief Statement (IDRS) and they are automatically included in the assessment. However, if there are any new claims, you need to mention those in your Main Tax Form.

Filing Income Tax Mistake 2:

My employer participates in AIS and forwards my employment income information to IRAS. So, I do not need to file a tax return.

Even if your employer participates in AIS, you must receive an indication from IRAS mentioning your eligibility for NFS. At the same time, if you have a new source of income or change in personal reliefs, you need to file income tax returns.

Filing Income Tax Mistake 3:

Excluding Rental Income from Income Details

If you own additional rental property or rent a particular portion of your apartment, you need to mention it in your additional income sources.

Filing Income Tax Mistake 4:

Not filing proper apportionment for Parent Relief

If you are supporting your parents above 55 years of age with their annual income under the eligible limits, you can claim Parent Tax Relief. However, if you have siblings who contribute a certain amount in supporting the parents, it is important to setup apportionment in parent relief claim. If you fail to do so, the Comptroller of Income Tax would split the relief equally among all the claimants.

What Are the Penalties for Missing Income Tax Filing Deadline?

Unlike your landlord, the government doesn’t take late income tax filings casually and there’s a hefty penalty in place for defaulters.

For taxpayers who do not file income tax returns by the due date, IRAS has different penalties in place including:

  • IRAS would issue an estimated Notice of Assessment against your name.
  • You would be liable for a penalty for not filing the returns.
  • IRAS has the authority to summon you to Court and you are likely to end up paying double the amount of tax assessed by IRAS.
  • IRAS can also issue a warrant of arrest against defaulters.

Penalties For Late Payment Of Assessed Income Tax

If you fail to make all the payments within 30 days of receiving the Notice of Assessment (NOA),

  • IRAS issues a Demand Note with 5% penalty on unpaid tax.
  • Additional penalty of 1% is applicable after the expiration of Demand Note deadline.

IRAS do not consider penalty waivers unless you have some exceptional reasons for the same. For consideration, IRAS would consider the tax filing history of the taxpayer and similar filing tendencies, if any.

Read these Income Tax Tips too.

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C.E.O @ The New Savvy
Anna Haotanto is passionate about finance, education, women empowerment and children’s issues. Anna has been featured in CNBC, Forbes, The Straits Times, Business Insider, INC and The Peak Singapore. She was nominated and selected for FORTUNE Most Powerful Women conference in 2016 (Asia) and 2015 (San Francisco, Next Gen). Anna has 10 years of experience in the financial sector and is currently a Director in Tera Capital. Her previous work experience includes positions at Citigroup, United Overseas Bank, a regional role in Business Monitor and a boutique private equity firm based in Shanghai. She graduated from Singapore Management University (Finance and Quantitative Finance).