The amount of tax deduction will depend on the number of VHIS policies claimed, the amount of premiums, and the tax rates that apply in your case. See the following example - Basic equation:
Tax deduction amount = Voluntary medical insurance eligible policy premium x Tax rate
For the year of assessment 2018/19, the standard rate is 15% and the marginal tax rate is 2%, 6%, 10%, 14% and 17%.
Tax Deduction Example 1: I am a taxpayer and I bought a voluntary medical insurance eligibility policy for myself. My tax rate is 15% of the standard rate.
Policyholder | Insured | Annual Premium Paid | Eligible Premium (up to $8,000 for the insured) | Assumed Tax Rate | Tax Saved |
I (taxpayer) | I | $10,000 | $8,000 | 15% | $1,200 |
Tax Deduction Example 2: I am a taxpayer. I bought a voluntary medical insurance policy for myself and my 60-year-old father. My tax rate is 15% of the standard rate.
Policyholder | Insured | Annual Premium Paid | Eligible Premium (up to $8,000 for the insured) | Assumed Tax Rate | Tax Saved |
I (taxpayer) | I | $10,000 | $8,000 | 15% | $1,200 |
I (taxpayer) | Father | $15,000 | $8,000 | 15% | $1,200 |
Total: | | | | | $2,400 |
Tax Deduction Example 3: I am a taxpayer and I bought a voluntary medical insurance policy for myself, a daughter under the age of 18 and a father who has reached the age of 60. My tax rate is 15% of the standard rate.
Policyholder | Insured | Annual Premium Paid | Eligible Premium (up to $8,000 for the insured) | Assumed Tax Rate | Tax Saved |
I (taxpayer) | I | $10,000 | $8,000 | 15% | $1,200 |
I (taxpayer) | Father | $15,000 | $8,000 | 15% | $1,200 |
I (taxpayer) | Daughter | $5,000 | $5,000 | 15% | $750 |
Total: | | | | | $3,150 |