Income Tax Rebate of 20% for YA2008

Or, put simply, a “discount” of 20% on your income tax.

Finance Minister Tharman Shanmugaratnam has announced in his budget speech that all resident taxpayers will get a tax rebate of 20% for Year of Assessment 2008.

I take this to mean that after you file your taxes this year (in April 2008), you will enjoy a “discount” of 20% on the tax that’s payable on your chargeable income.

Note the difference between assessable income and chargeable income.

The rebate will be capped at $2,000.

This means: If your chargeable income is $120,715, you would normally have to pay $10,000 in personal income tax. But because of this just-announced rebate, you will save $2,000!

For those earning more, the rebate amount is still $2,000 due to the cap.

How wonderful.

(I mean, how wonderful it is to have your chargeable income at $120,715.)