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Published on March 25, 2008

The tax code allows you to claim rebates for various living expenses, so if you are claiming these refunds, you can count on receiving a cheque from the Revenue Department.

But are you fuddled about how to spend the refund in the most appropriate way?

Rebates are allowed for investment in long-term equity funds (LTFs) and retirement mutual funds (RMFs), insurance, housing loans, donations, educational support and regular taxation allowances for children and parents.

Here are some spending suggestions based around the living expenses for which these rebates are allowed, aimed at making you feel happy about the way you are using your tax windfall.

First, since part of your refund may come from investing in an LTF or RMF, you could use this money to further boost your wealth - to create new returns from existing ones.

You could buy gold and keep it as a long-term asset. Gold investment seldom leads to long-term losses, as long as you do not panic and sell it when the gold price declines.

You could also put the money into more stocks or mutual-fund units, in order to boost your wealth in the long term. However, the value of these investments could tumble in the short or medium term, and you should be prepared for minimal regret if you lose your tax rebates in this fashion.

If you think you deserve a reward for being thrifty, you could splash out on a trip, expensive clothes or cosmetics. However, if you are one of those who are concerned about risk and buy insurance to cover that, perhaps you should use your tax rebate for expenditure on insurance, to lower risk even further.

The Revenue Department allows each individual a tax allowance of up to Bt40,000 a year for insurance - enough to provide security for yourself and others around you.

If you receive a rebate from health insurance, you should perhaps spend the money in a way that improves your health. This will surely be money well spent.

You could join a fitness centre to strengthen your heart and other muscles. You could buy food

supplements, particularly if you are one of those busy people who do not take time for proper nutrition.

If you receive a rebate from accident insurance - which must be tied with other insurance - you may spend the money in meritorious ways to boost your mental state. You could buy a coffin for an abandoned corpse or donate to a hospital.

People with housing loans are eligible for rebates of up to Bt100,000 annually. In a way, this is a reward for making such a big lifetime investment. The money could be spent to improve your home. You may buy new furniture, new trees, plants and ornaments to revitalise your garden or a new liquid-crystal-display television set or home theatre to entertain your family.

Of course, mortgage payers may want to relax themselves, and a superb night out at a high-end restaurant may be just the incentive needed to keep fighting to make those interest payments. On the other hand, a family trip to a favourite picnic spot may do the trick just as well. Of course, you could simply save the rebates and repay debts in advance, to help lower your monthly bills.

If you receive a rebate from having made donations, you should perhaps spend the money to make yourself feel happier. The tax allowance for donations covers up to 10 per cent of income after expenses and other allowances.

To obtain rebates from donations, these should be made to organisations where you cannot otherwise claim a credit against tax. These are mostly small organisations with small budgets that are generally overlooked by others. If you are a Buddhist, you may wish to use your tax rebates to give alms. If you belong to another religion, you may make a similar donation.

Rebates for educational support should be spent on improving yourself or your family. You could take a cooking course or a music class - something that entertains as well as educates. You may encourage your children to take extra lessons, perhaps in English.

The tax allowance for educational support amounts to twice the actual spending but not more than 10 per cent of income after other expenses.

Finally, the rebates from tax allowances of Bt15,000 each for children should be spent on the children. You may arrange an extra tutorial class to strengthen their knowledge or let them study subjects not covered in regular education.

If you are claiming rebates from the Bt30,000 tax allowance for each of a dependant father and mother, you should spend that money on your parents. Giving them cash may be best, since the elderly often prefer cash over gifts. But why not take them out to eat at a fancy place?

Spending that money for your children's future may be an interesting choice. But at the same time, you should make a wish that they will treat you as well as you are treating your own parents.

Anoma Srisukkasem

The Nation