5 to 10 Years Plan - Income Tax II

From 5 to 10 Years Plan - Income Tax 1, we discussed about income tax rate and valid claims. Income tax rate for 20,001 - 30,000 is 3.75% and it increases when your income become higher. It is logical because richer people earns easily and rich people must contribute more because they got more from the society (my theory).

If you consider yourself rich then this is not the right topic for you. I targeted this topic just for poor school leavers like me where 1% of your income is negligible.

I have too many stuff in head and I really wish to put everything here but I need to write according to the topic. So may really bored you but this information may not known by many other peers.

For us, avoiding interest is the way to avoid unwanted losses. There is no point for a leaking water tank for the starting. My dad who did not received any average education often missed this point, even though he can earns quite a decent amount during his younger day but often interest kills him off. As I mentioned on my first post on compound interest, the story does not ended after your loan is settled. The compound interest has to do with every little thing in our life if you still want to live in this city. (including your hometown and all the place in the world unless you are going to stay in forest).

Avoid your credit card interest (this is VITAL!!! or if you can avoid credit cards), avoid unpaid student loan interest as well as your house loan interest in the future. Today let's avoid income tax interest. This once nearly hurt my father. In Singapore, payment of income tax due after one month.

1. Late income tax payment = 5% of unpaid tax and you get a Demand Note.
2. Still late after Demand Note is filed = 1% per month up to 12%.

I am yet to confirm this, if you wish to know more please contact IRAS, 12% of the unpaid or 12+5% of the unpaid. If you know, please comment below. Thanks.

Let say 12% and I mentioned you need to pay $937.5 as income tax if your annual income is $25,000 and the extra cost incurred is $112.5. Who wants to pay extra? Moreover, if IRAS does not happy with your payment arrangement, you might get sued in the court. And under Singapore Civil Law, if the Defendent lost in a suit, he/she needs to pay the legal fees of both parties. This includes their lawyer fees.

By the way, if you are facing financial difficulties, you can arrange the payment methods with IRAS. (and this payment arrangement talk can be done with the bank if you can't pay your loan, talk to them and don't pretend nothing happen.)

You see I am not teaching anyone to illegally exempting himself from tax but I pointed out mistakes some people made. Today article will ends here. The next article is regarding an old issue brought out on 5 to 10 Years Plan - Centre Provident Fund (CPF), can CPF be the solution? We shall see...