Yes, tax deductions may increase your tax refund. When someone claims for a tax deduction, the amount of income that can be taxed decreases. This makes the overall tax liability smaller and the tax payer may owe less in taxes for that particular tax year. Suppose the amount of withheld tax from someone's pay in a tax year is greater than the reduced tax liability from deductions. In that case, the tax payer will be eligible for a bigger tax refund.
For example*, if your salary is 40,000 THB per month and you are taxed at 15%, you would have 6,000 THB withheld which would equal 72,000 THB total withheld for a tax year. By applying a 10,000 THB tax deduction on your annual salary of 480,000 THB, you would have 470,000 THB in taxable income. Your new taxable income of 470,000 THB subject to 15% tax would mean only 70,500 THB total withheld for a tax year. However, since you have had already 72,000 THB total withheld from your annual pay, you would be eligible for a 1,500 THB tax refund.
The formula below highlights this example;
Monthly salary of 40,000 THB * withheld tax rate of 15% = withheld tax of 6,000THB
Withheld tax of 6,000THB * 12 months or 1 tax year = 72,000 THB withheld for tax year
Monthly salary of 40,000 THB * 12 months = 480,000 annual taxable income
Annual salary of 480,000 – Total insurance premium paid in tax year of 10,000 THB = new annual taxable income of 470,000 THB
New annual taxable income of 470,000 THB * 15% tax = updated 70,500 THB withheld for a tax year
Initial tax withheld from annual salary of 72,000 THB – updated 70,500 THB of withheld tax = 1,500 THB tax refund