highsulphur
Great Supremacy Member
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- Aug 16, 2011
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Too bad I have a srs account elsewhere already
Worrying about being too successful and having too much capital gains? Seriously
Besides, there is no difference in the treatment of capital gains whether inside or outside SRS. This is a common misconception. In fact, with good planning of withdrawals, SRS allows you to pay no taxes on the money.
Hey lzydata, I believe you got it wrong. Capital gain outside SRS is not subjected to tax. But capital gain inside SRS might be subjected to tax upon withdrawal if you exceed the lower limit.
For a realistic illustration of why this is wrong, see MOF's FAQ. Here is a simplified example.
Suppose you are able to get 900% capital gains on your investment, and assume your current and future tax bracket is both 10%. You start off with $10k.
No SRS: First, you pay income tax of $1k. You have $9k left. Then you invest it, and x years later, you have $90k.
SRS: You contribute the $10k to your SRS account, so you can invest the whole amount. X years later, you have $100k. If you withdraw it in one shot, you are left with $100k x 90% = $90k.
$90k = $90k. There is no difference, capital gains or otherwise.
In fact, the SRS case above is not accurate. With competent planning, you need only pay minimal or even no taxes on your SRS funds.
First, only 50% of the withdrawn amount will be taxed. Hence the tax payable in future is $5k, not $10k. $95k > $90k.
Also, you can choose to withdraw not in one shot, but up to over 10 years. Suppose you withdraw the $100k over 3 years i.e. $40k, $40k, $20k. Assuming you have no other income, you will pay no income taxes for these withdrawals. So you are left with the full $100k.
there are ppl srs-ing the max amt each year. this will add up to alot of money.
Hi folks,
What are some of the ways that you save on your taxes? Share your ideas here.
We’ll invite some of the best contributors to this thread out for lunch.
^Andi P.
do we need to pay any fee to open srs at ocbc and if we have say 20k deposits gradually, can use funds for ocbc fixed deposit as investment gains?
Thanks
Hi there. Beloware the products eligible financial products for SRS account:
• Fixed Deposit
• Unit Trust
• Bonds
• Stock
• Structured Deposit
• REITS
• ETFs
• Single premium life insurance plans
^Eric
For OCBC Bank
tks ... alot if no invest the money, what is the base interest rate for money in the srs acct? thks
Open a SRS with Ocbc. Contribute $8,000 to your SRS. Get free Robinson vouchers and reduce my income tax.
Use your SRS to invest on OCBC share.
Kill 4 bird (Robinson vouchers, reduce tax and capital gain /dividend from OCBC + free lunch from OCBC)
Btw is the free lunch over? Lol
poor ppl like me no need to save on taxes because my tax so low
good thread bookmark
Just curious.
was there ever a free lunch ever?