Investment Tax Rebate Calculation Formula: Section 78 & Eligible Assets
Investment tax rebate under Section 78 equals 3% of eligible investment or 15% of total taxable income, capped at ৳10,00,000. DPS limit of ৳1,20,000, insurance, and government securities rules.
- Rebate amount = 3% of Eligible Investment, or 15% of Total Taxable Income, or ৳10,00,000 (whichever is lowest).
- DPS deposit qualifies up to an annual maximum of ৳1,20,000.
- Life insurance premium qualifies up to 10% of the policy's sum assured.
- Treasury bonds and government securities qualify up to ৳5,00,000.
- Contributions to GPF, RPF, and approved superannuation funds qualify.
1. The Section 78 Statutory Rebate Formula
Tax rebate is calculated as the lowest among three statutory limits:
- •Formula A: 3% of total allowable investment made during the income year
- •Formula B: 15% of total taxable income of the taxpayer
- •Formula C: Absolute statutory ceiling of ৳10,00,000
2. Recognized Investment Channels
To qualify for rebate under the Sixth Schedule Part 2, investments must be channeled into recognized instruments:
- •Deposit Pension Scheme (DPS) with banks: up to ৳1,20,000/year
- •Life insurance premium: up to 10% of sum assured
- •General Provident Fund (GPF) and Recognized Provident Fund (RPF)
- •Government Treasury bonds and securities: up to ৳5,00,000
- •Approved mutual funds and listed stock market shares
Frequently Asked Questions (FAQ)
Q: Does purchasing savings certificates (Sanchayapatra) qualify for rebate?
A: Under the modern 2023 Act, new purchases of savings certificates do not qualify for direct Section 78 rebate, but TDS deducted at source is adjustable against payable tax.
Conclusion & Tax Tips
Allocating funds to DPS and insurance allows taxpayers to legally minimize their tax liability while building personal wealth.
All data, tax brackets, thresholds, and statutory interpretations in this article are compiled directly from the Bangladesh Income Tax Act 2023, Finance Ordinance 2026, and official NBR circulars.
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Relevant statutory guidelines based on Income Tax Act 2023 & NBR circulars