IRAS catches landlords for incorrect rental income

The amount was close to four times the sum recovered, or $1.3 million, in the previous exercise, which was reported in 2023.

During the previous audit, which covered three years, IRAS probed about 450 landlords and eventually took almost two-thirds of them to task.

Referring to the latest batch of errant landlords, IRAS said it will not hesitate to take swift enforcement action to ensure that all owners who lease out their properties meet their obligations and contribute their fair share of taxes.

It is a serious offence to try to deceive the taxman by submitting incorrect information, with the intention of gaining a profit by paying lower taxes.

For instance, those who are caught submitting tax returns containing errors, omissions or discrepancies can be ordered to pay penalties of up to 200 per cent of the undercharged tax amount.

The more serious offenders can also be fined up to $5,000 and jailed for up to three years.

Those who deliberately cook up sham arrangements to evade taxes are liable for harsher penalties of up to 400 per cent of the undercharged amount, as well as fines of up to $50,000 and jail terms of up to five years.

As the tax reporting season ends in about two weeks, on April 18, landlords who have yet to submit their tax returns are reminded by IRAS to verify and declare their rental income details via the myTax portal.

If the rental income has not been included in their pre-filled tax returns, such as employment income submitted by their companies, they must file a separate tax return for the actual rental income.

Similarly, landlords who discover incorrect rental income details in their latest tax assessment must submit the necessary changes using the “Amend Tax Bill” service at the myTax portal within 30 days from the date of their tax bills.

To avoid being caught in the next audit, IRAS advises landlords who have submitted incorrect rental income details in previous years to own up to their mistakes by making a voluntary disclosure at its tax portal. There is no expiry date for the prosecution of tax offences.

“Penalties for voluntary disclosures may be reduced if qualifying conditions are met,” IRAS said.