Investment in LTF and RMF

How to choose the right Retirement Mutual Fund (RMF) for me?
Investors should spread their investment across various funds having different invesment policies to diversify risk backed with asset allocation suiting their acceptable risk levels. For example, those who are still young and have long investment  period may invest in equity funds or allocate part of their money to invest in foreign equity fund or gold or funds investing in high-growth stock funds. These funds may contain high volatility but tend to give a higher yield.
On the contrary, if you belong in a middle-aged group or plan to retire soon, you may choose to invest in RMFs that have lower risk and tend to give consistent return, for example, fixed income funds or mixed funds investing partly in debt  instruments to reduce risk .


How much can I invest in RMF?
  • LTF* investment amount eligible for tax deduction is not more than 15% of your annual assessable income, and not more than 500,000 Baht. (*can invest for tax deduction until 2019 only)
  • RMF investment amount should not exceed 15% of your annual assessable income, and should not be more than 500,000 Baht when combined with provident funds or government pension funds and retirement insurance premium.
Can I buy RMF more than 15% of my income or the 500,000 Baht limit?
 If you buy RMF more than the specified limit, when redeeming the units, the capital gain on the exceeding portion must be included in the annual income for income tax calculation. Such capital gain is classified as income under Section 40(8) of The Revenue Code.
Breach of LTF and RMF Investment Conditions
  • LTF   (Invest for tax deduction 2019 only)
In case of sale of LTF units before 7 calendar years, investors must return the tax privileges on the redeemed units and pay 1.5% surcharge per month on the tax amount. The capital gain on redemption must be included in the annual income for tax calculation. Redemption is based on “First in First out” (FIFO) basis.
  • RMF
In case  of breach and investment for more than 5 years, investors must  pay the amount of tax exemption for the past 5 years (included the year before the starting year of breach)
In case of  breach and investment for less than 5 years, investors must pay the entire amount  of tax exemption, while  capital gain from incompliant redemption is deemed as taxable income in the year of redemption according to  rules of the  Revenue Department.