Singapore Income Tax Act, 1947 | Q & A

Answer 1(a)(ii)
In terms of Singapore Income Tax Act, 1947, the treatment for the three
expenses as stated in case study is discussed as under:
Expense 1
Entertainment expense is generally considered as part of the sales business
expense . As it is incurred while doing a business with the client/ procuring the
client, the same will be allowed as a deduction. (Murray, 2020)
Expense 2
Shopping expenses incurred in relation to buying of clothes is not allowed as
deduction as it shall fall in the category of private expense. Further, private
expense is not eligible for deduction as business expenditure.
Expense 3
Travelling expense is not allowed from home to office and vice versa as they fall
in the category of private expense. Hence, the said expenditure shall be
disallowed in the Income- tax return . (PWC.com, 2020)
Answer 2(b)(i)
Three main consideration one must keep in mind when planning for retirement,
are here in below:
1) Corpus: one needs to consider the corpus available with oneself before
deciding on the choice of housing as the corpus shall determine whether
one can afford a very luxurious house or a normal house
2) Annual Earning post retirement: one needs to understand the regular
source of income for an individual post his retirement before taking
decision regarding the choice of house;
3) Annual spending and years of life estimation: In the said part, one
needs to understand the expenditure of an individual/ family as if the
expenditure is huge, one needs to settle for small house based on the
corpus of individual.
Answer 2(b)(ii)
The principal difference between the two retirement needs method are here-in-
below:
(a) Insurance or Endowment Plan: The insurance policy is a multi-package deal
which besides providing coverage against accident and death, also provides
a saving component. The two most common form are endowment insurance
and investment linked policies. The circumstance under which this method
is used encompass when an individual does not want to take any risk and
also want an insurance protection against any damage;
(b) CPF special Account: The growth rate in CPF is steady at approximate range
of 3.5% to 5% and is generally preferred by an individual who wish for a
steady return. However,