Figuring out tax deductions can help people save more money. By using these deductions wisely, taxpayers can lower their taxes and make better use of their money in the long run. Knowing how to use tax deductions well is important for saving money and reaching financial goals. In this guide, we'll look at different ways people can use tax deductions to save more money and make their financial futures brighter.
Deductions and Allowances
Certain deductions and allowances are allowed in the calculation of the taxable income. Taxpayer shall make deductions from assessable income before the allowances are granted. Therefore, taxable income is calculated by:
TAXABLE INCOME = Assessable Income - deductions – allowances
Deductible expenses
The amount of personal expenses that may be deducted depends on the category of assessable income. In case of income from employment, a deduction of 40% is allowed subject to a maximum of Baht 100,000
Allowances
Allowances could be categorized into 2 catetagories after the deduction of expenses as follows;
Personal allowance
Types of Allowances |
Amount |
Single taxpayer |
60,000 baht for the taxpayer |
Spouse ( with no income) allowance |
60,000 baht |
Legitimate child allowance |
30,000 baht each |
Additional allowance for legitimate child of the taxpayer or the spouse from the second child onwards who was born in or after 2018, each |
60,000 baht each |
Taxpayer’s adopted child (maximum 3), each (If there are legitimate and adopted children together, a maximum of only 3 children is allowed) |
30,000 baht each |
Parents allowance |
30,000 baht for each of taxpayer’s and spouse’s parents if such parent is above 60 years old and earns less than 30,000 baht |
Care of disabled or incapacitated family members |
60,000 baht each |
Care of a disabled or incapacitated person other than a family member |
60,000 baht each |
Specific Allowances
Types of Allowances |
Amount |
Life insurance premium paid by taxpayer on his/her own life |
Amount actually paid but not exceeding 100,000 baht each |
Health insurance premium paid by a taxpayer to a life or non-life insurance company in Thailand for his/her own health |
Up to a maximum of Baht 25,000, However, the deduction for this premium together with the life insurance premiums referred to above, must not exceed Baht 100,000 in total. |
Approved provident fund contributions |
Amount actually paid at the rate not more than 15% of wage, but not exceeding 500,000 baht |
Long term equity fund |
Amount actually paid at the rate not more than 15% of wage, but not exceeding 500,000 baht |
Home mortgage interest |
Amount actually paid but not exceeding 100,000 baht |
Social security fund contributions |
Amount actually paid each |
An investment in a retirement mutual fund |
Amount not exceeding 30% of assessable income received which is subject to income tax, with a maximum of Baht 500,000. |
Expenses paid by the taxpayer or spouse for antenatal care and child delivery |
Up to Baht 60,000 for each pregnancy. |
Charitable contributions |
Amount actually donated but not exceeding 10% of the income after standard deductions and the above allowances |
