Statutory, assessable and chargeable income are 3 different definitions. Taxpayers need to know the difference between the 3 of them. Tax payable is only calculated on chargeable income.

 

Statutory Income refers to all income (net of deductible expenses) less capital allowances.

Statutory income = All income (net deductible expenses) – capital allowances

 

Assessable Income refers to Statutory Income less losses from trade, business, profession or vocation less approved donations.

Assessable Income = Statutory Income – Losses from trade, business, profession or vocation – approved donations

 

Chargeable Income refers to Assessable Income less personal reliefs (applicable to Singapore tax residents only)

Chargeable Income = Assessable Income – Personal Reliefs

 

Therefore,

Tax payable = Chargeable Income x Tax rate

 

If you have any tax-related queries, you can contact the Raffles Corporate Services tax consultants at [email protected].

 

Yours sincerely,

The editorial team at Raffles Corporate Services