Income Tax - Course Fee Relief

What can be claimed:
And I've came to realised that actually almost all course, which includes private courses, seminars and even conferences can be used to claim tax relief up to $3,500. So do remember to keep all your courses receipts and claim them for income tax rebates. But it has to be related to your current trade, business, profession, vocation or employment.

What can't be claimed?
For courses, seminars and conference that's meant for leisure or hobby (e.g. art & craft, photography, learn Japanese etc that's non work related), or of general skills (e.g. How to use computer or even how to surf the net etc.)

When can you claim?
In the event that it doesn't fit the criteria, don't worry as you will have up to 2 years to claim for your course fees. e.g. For a course that you've attended in 2007, you can claim it when filing for income tax of assessment year 2009, (which is around apr - may 2010), provided that you fit the criteria of the course being related to your new trade, business, profession, vocation or employment then. This 2 year period also apply in the case of that your assessable income is  <$22,000.

For more info, see http://www.iras.gov.sg/irasHome/page04.aspx?id=194.

Income Tax

There are various modes of payment, of which I feel that the default IRAS monthly giro system is still the most convenience after all. 1st, it deducts directly from your bank account every month. It's comes with true 0% interest with no processing fee. U gain all the interest earned from the rest of the money kept in whichever instrument that you invest it in. Even ig you put the money inside bank a/c, at least there's interest ba. :D

Find out more about taxes in Singapore @ http://iras.gov.sg/

Calculate your taxes @ IRAS Tax Calculator

Unit Trust

Unit Trust (also known as a collective investment scheme) is a pool of money managed collectively by a fund manager. The pool of money usually comes from retail buyers, such as you and me. Unit Trust is started with investors buying units in a particular trust / fund, e.g. usually at least $1K per investment. All these money are pooled together to buy a portfolio of assets such as other unit trust, stocks and shares, bonds, or treasury bills, etc. The portfolio of assets purchased by the fund depends on the investment objective of that unit trust.

Usually, there are 3 types of unit trusts:

1. Equities (consists mainly of Stocks and Shares, most risky)
2. Bonds (consists mainly of bonds, treasury bills, notes, least risky)
   
3. Balanced (a balanced mix of the 2 types mentioned above, risk level is in between the above)

And these basic type of unit trusts are then further dividend into various categories:

1. Money Market Fund
2. Global Fund
3. Sector Fund
4. Country Fund
5. Income Fund
6. etc..

For all unit trust, past performance are not indicators for future performance and there's always a chance of losing all your capital. So please ensure that you do know what exactly are you buying and make sure that the sales personnel do countersign your application form with the claims they mentioned if they claim that the returns is guaranteed. If they don't dare to countersign with their name and ic no as well, with all the claims they've made, do reconsider your decision in the purchase.

The risk factor varies between the various type of funds, which is not covered under this article. Alsoe, I need to mention about the sales charges. There are basically 2 types of sales charges, front end and back end. Most of the time, it's either front end or back end charges for a particular fund but rarely both. So it's best to check with the person that you buy the fund from or read the information carefully.

Front end sales charges are deducted from your initial investment amount upfront, the moment that unit trust is purchased, as a result, you will be purchasing less units. Usually, the sales charges varies with the mode that you purchase a fund. If you buy it over the internet such as POEMS, fundsupermart, etc, the sales charges is lower, it may varies around 1 - 2.5% depending on the fund. If you purchase it through agents from the bank, it's usually about 5%. If you purchase it through agents from NTUC income, it's usually about 3% but the funds available are quite limited and I personally won't do that ever again due to the low returns and high charges. If you purchase it through agents from various financial consultant, the sales charges may varies, there's a slight chance that you might be able to negotiate the sales charges.

Back end sales charges are deducted when you sell your investments, usually this will be waived or decreased gradually when you hold the investment over a period of 5 years or more. For this case, do take note of the details before purchasing but it can be negligible if you intend to hold it for long term, e.g. more than 10 years, but still check about whether the fees will be waived or not as well.

Switching Fees may or may not be applicable depending on the policy of the particular plan that you've purchased and depending on the company itself. Usually it varies from 0-2.5%. Anything higher does not really makes sense.

Do take note of all the fees / charges that may be involve and the risk level of the unit trust should you purchase any. :)