Guru Speak: Insurance policy as NY gift

As the last day of the year draws closer, I would like to discuss another good value that life insurance can give you - a tax allowance that can relieve your tax burden next year.

One thing that the government does that I think is very helpful to all of us is allowing a certain amount paid for life insurance to be deducted from the assessable income (the total amount earned which is subject to tax). This also applies to the amount paid for life insurance of your spouse.

The maximum deductible amount has recently been raised to Bt100,000. That translates to a big saving, especially for high-bracket earners. Buying life insurance is therefore a very good way to spend money - you get valuable life coverage and the principal is fully secure.

Of course, there are conditions and limitations that you need to know in order to take the most advantage of this tax-deductible. Since last year, there have been some changes to the conditions for deducting life-insurance premiums from assessable income. Please consult your financial adviser to find out the kind of insurance plans most beneficial to you in terms of coverage that best suits your needs and budget, and tax-relief entitlement.

As you are well aware, the cut-off date for the incomes to be included for tax calculation is December 31. That means all the deductibles for that calculation have to occur this year as well. If you have not used up this deductible amount, or haven't used it at all, you should start acting now. Take your time to select the best plan for you, but make sure you pay the premium by the end of the year.

Keep the document received from the insurance company for your tax filing. You will need it as a supporting document along with other evidence for deduction - for example, retirement mutual fund and long-term fund units and housing-loan interest.

As law-abiding and responsible citizens, paying tax is our duty. It is your legitimate right, however, to make use of the deductibles allowed. As I said in my earlier articles, life insurance offers tremendous benefits. So give yourself a gift before the year ends. Buy life insurance, which entitles you to an income-tax saving, and have the peace of mind that it will bring.

You will find this gift extremely valuable!