Chargeable income (CI) is the portion of income that is subject to tax in Singapore after allowable deductions, reliefs, and exemptions are applied. In the Singapore tax system, IRAS uses chargeable income to calculate the final income tax payable by individuals and companies. As a result, it is the key figure shown on a Notice of Assessment (NoA).
When it matters
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When preparing corporate or individual income tax returns.
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When estimating income tax payable for a Year of Assessment (YA).
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When applying tax exemptions, reliefs, or incentive schemes.
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When reviewing IRAS Notices of Assessment for accuracy.
Therefore, understanding CI is essential for tax planning and compliance.
How chargeable income is determined
Step 1: Assessable income
This includes income earned or accrued in Singapore, such as business profits, employment income, or rental income.
Step 2: Allowable deductions
Deduct expenses that are wholly and exclusively incurred in producing income. For example, business expenses, approved donations, or capital allowances.
Step 3: Reliefs and exemptions
Apply relevant tax reliefs or exemptions, such as the Partial Tax Exemption (PTE) for companies. Consequently, the remaining amount is the CI.
Chargeable income for companies (Singapore)
For companies, it is calculated based on adjusted profit after tax adjustments. Meanwhile, companies may qualify for:
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Partial Tax Exemption (PTE)
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Start-Up Tax Exemption (SUTE), where applicable
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Industry-specific tax incentives
As a result, the effective tax rate is often lower than the headline corporate tax rate.
Chargeable income for individuals (Singapore)
For individuals, it is calculated after deducting personal reliefs from total income. For example, reliefs may include earned income relief or CPF relief. Therefore, CI differs from gross salary.
Worked example (SG context)
A Singapore company earns S$300,000 in revenue and incurs S$200,000 in allowable expenses. After tax adjustments, its assessable income is S$100,000. The company then qualifies for partial tax exemption on part of this amount. As a result, only a reduced portion of S$100,000 becomes CI for corporate tax purposes.
Common pitfalls & tips
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Confusing assessable income with CI.
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Claiming non-deductible expenses, leading to IRAS adjustments.
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Overlooking available tax exemptions or reliefs.
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Using the wrong Year of Assessment when filing returns.
Therefore, tax computations should be reviewed carefully before submission.
FAQs
Q1. Is CI the same as taxable income in Singapore?
A1. Yes. In practice, it refers to the income on which tax is charged by IRAS.
Q2. Where can I find my CI amount?
A2. It is stated on the IRAS Notice of Assessment (NoA).
Q3. Does CI include tax exemptions?
A3. No. It is calculated after exemptions and reliefs are applied.
Q4. Is CI taxed at the full headline rate?
A4. Not always. Companies often enjoy partial exemptions that reduce the effective tax rate.
Q5. Can IRAS adjust CI after filing?
A5. Yes. IRAS may revise chargeable income following reviews or audits.
