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Deduction for expenditure incurred by individual in deriving passive rental income in Singapore

Income Tax Act 1947

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—(1) This section applies for the purpose of ascertaining an individual’s income for the basis period for the year of assessment 2016 or a subsequent year of assessment from the letting of a residential property or a part of a residential property in Singapore (not being an excluded property for that basis period), that is chargeable to tax under section 10(1)(f) (called in this section rental income).(2) Despite any other provisions in this Part, if there are any outgoings or expenses deductible against the rental income under any provision of this Part apart from section 14(1)(a), then there is to be deducted, in lieu of those outgoings or expenses, an amount of expenses computed in accordance with the formulawhere Ais 15% or such other percentage as may be prescribed under section 7; and Bis the gross amount of the rental income from the residential property derived in the basis period for that year of assessment.(3) This section does not apply to —(a)an individual who has made an election under subsection (4) for this section not to apply to the individual’s rental income derived in the basis period for the year of assessment in question;(b)any rental income derived by an individual through a partnership; and(c)any rental income derived by an individual acting in the capacity of a trustee of a trust.(4) An individual may, in such form and manner and within such time as the Comptroller may determine, make an election to the Comptroller for this section not to apply to all of the individual’s rental income derived in the basis period for a particular year of assessment.(5) If an individual derives rental income, other than income referred to in subsection (3)(b) or (c), from more than one residential property (not being excluded properties for the basis period) in a basis period, the individual may not make an election under subsection (4) in respect of only one or some of those properties.(6) In this section —“excluded property”, in relation to a basis period, means a residential property which, at any time during the period rental income is derived from the property by the individual in question, is permitted under the Planning Act 1998 to be used whether wholly or in part for any purpose that is not a residential purpose;“residential property” means —(a)any detached house, semi‑detached house or terrace house; or(b)any part of a building (such as a flat or a condominium unit) constructed or adapted for human habitation,that has a single annual value ascribed to it in the Valuation List prepared under section 10 of the Property Tax Act 1960, and is permitted under the Planning Act 1998 to be used for a residential purpose, and includes such other premises as may be prescribed as residential property, but (to avoid doubt) excludes premises that are so permitted for use as a dormitory.(7) In this section, a property or part of a property is permitted under the Planning Act 1998 to be used for a particular purpose if —(a)it is permitted by a written permission granted under section 14 of that Act to be used for that purpose;(b)it is authorised by a notification under section 21(6) of that Act to be used for that purpose; or(c)such use (being an existing use of the property or part and not being the subject of a written permission granted under section 14 of that Act or a notification under section 21(6) of that Act) was a use to which the building or part was put on 1 February 1960, and the building or part has not been put to any other use since that date.[14Y

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