Save yourself some more taxes and at the same time put your money to good use, consider topping up to your parent's retirement account (assuming they are above age55).
After all, CPF Retirement Account (CPF RA) attracts 4% interest and (if your parents are aged 55 and above) can earn up to 6% interest on the first $30,000 of their combined CPF balances, and up to 5% on the next $30,000.
Eligibility and benefits for topping up to parents' Retirement account (RA)
The top-up to their account is capped at Enhanced Retirement Sum (ERS) if they are age55 and above. As of 2020, that amount will be $271,500.
If they have more than that amount, you cannot top up.
But if they have less, you may top up and increase your parent's retirement sum. In doing so, you can earn a tax relief and the cap for that is $7,000.
Common concern: Their subsidies are NOT affected with your top-up
If your parents stay in HDB, there are benefits such as GST vouchers and U-Save rebates (above). There are also healthcare subsidies from the government. All these are part of the Silver Support Scheme.
Your top ups to your parents' retirement account will NOT count towards the CPF Contribution criteria for them.
Benefit more with Matched Retirement Savings Scheme (MRSS)
Do check also if your parents earn less than $4,000 a month on average and have less than the Basic Retirement Sum (BRS) in their CPF RA.
As of 2021, the BRS is $93,000.
If so and they are of age 55-70, your top up may also get benefit under Matched Retirement Savings Scheme (MRSS).
This MRSS matching is capped at $600 but 1-1!
It is mentioned that about 435,000 Singaporeans will be eligible for the scheme every year and this will be introduced from 2021 to 2025.
Conclusions and further resources on tax saving
There is no criteria on parent's income currently. This is unlike RSTU to spouse which has a $4,000 yearly limit to get tax deduction.
Do note that your total tax relief has a $80,000 cap.
There are many methods to save taxes included Retirement Sum Topping Up (RSTU), Supplementary Retirement Scheme (SRS) contribution and making donations. If you're on a high income, do check this previous article
Also, if you'd like to find ways to increase your own CPF for retirement, also check the video tutorial below! Hope it helped you saved taxes and put your money to better use =)