Taxpayers will get a one-off rebate of 20 per cent of tax payable for the 2017 Year of Assessment but the handout will be capped at $500.

The rebate, which applies to income earned in the 12 months to Dec 31 last year, will cost the Government $385 million.

Taxpayers with a chargeable income of $67,856 - with tax payable of $2,500 - will get the maximum rebate of $500. Anyone with assessable incomes above $67,856 will be restricted to the same amount.

Mr Panneer Selvam, partner with the people advisory services at Ernst & Young Solutions, said the rebate will benefit those earning more than $42,500, who comprise about 70 per cent of all taxpayers.

He worked out this income level based on certain assumptions, such as a taxpayer with two dependent children and a non-working wife.

"The tax rebate of 20 per cent, capped at $500, will benefit a taxpayer who earns more than $42,500 (that is, monthly income of $3,270, including a 13th month annual wage supplement)," he said. This is because the chargeable income after deducting personal reliefs is likely to be $20,000, which attracts zero tax.

Ms Sabrina Sia, tax partner at Deloitte Singapore, said: "Due to the cap, the rebate is expected to benefit the lower and middle-income groups more than the higher- income earners. This is in line with the Government's position that more should be done to help the lower-income earners rather than those who can better afford to pay taxes."

KPMG Singapore's head of personal tax and global mobility services BJ Ooi noted that the $500 cap is lower than in past budgets, when the limits have ranged from $1,000 to $2,000.

"I was hoping the Government would give more. Still, it is welcome news for many," he said.

Tax rates move up progressively. Those with a chargeable income above $320,000 pay 22 per cent.