The PRSA Scheme is applicable to both an employee and a self-employed individual. Unlike any other plan, this scheme is beneficial for workers as it offers flexible and convenient savings for retirement. You can contribute as much as you like and withdraw your funds when you decide to withdraw them. Another convenience this scheme offers is that you can continue with your PSRA plan even while you change jobs. If you work for a company, your employer makes a contribution in addition to your own contribution to your PSRA plan. Contributions are generally made in two terms. One is for monthly contributions and the other is for a single contribution as a whole. Most employees prefer monthly contributions as they are easier to pay each month. These aspects are the most favorable and motivate each collaborator to contribute to their retirement savings while still working. In addition to this, the government encourages employees to enroll in PSRA plans by providing tax relief options. Again, both employees and self-employed are eligible to take advantage of the tax relief.
The application for tax relief depends on several aspects, such as the age of the employee and the amount of the contribution up to a fixed percentage of the person’s gross income. However, there are no limitations on the contributions you make. These contributions are in turn invested in various funds, and the interest earned will be tax-free until benefits are withdrawn after retirement. Retirement funds are generally withdrawn at ages 60 to 75.
The maximum gross income for tax relief varies depending on the different PSRA procedures followed in various regions. It can be used by employees with a minimum age limit of less than 30 years up to a maximum of 60 years or more. For employees under 30 years of age, you receive as a percentage of your income is 15%. For the age group over 30-40 years old, it is 20%. For the age group over 40-50 years old, it is 30%. For the age group over 50 to 60 years old it is 35% and for the age group over 60 years old it is 40%.
To claim tax relief, one of the important requirements is that your annual income must be taxed under the government’s income tax laws. All contributions made to the PSRA plan will receive tax relief upon final withdrawal of retirement funds. It is mandatory for all self-employed workers to add their contributions to the self-assessment tax return form available online. This is necessary to qualify for tax relief for self-employed business people.
If you meet all of the criteria listed above, then you are eligible to file. You can contact your PSRA provider for details and claim tax relief when you decide to withdraw your contributions and receive the funds after retirement. Contribute more to receive a higher percentage of tax relief for a satisfying retirement.