Paying taxes is a responsibility—but saving on them is a smart choice. In Bangladesh, the Income Tax Act 2023 offers taxpayers a variety of investment avenues to reduce tax Through Investments by claiming tax rebates. These investment-friendly options not only ease your tax burden but also help build a more secure financial future.
If you’re aiming to legally reduce your tax liability, this guide will walk you through the approved Tax Saving Investments—as outlined in Part 3 of the 6th Schedule of the Income Tax Act 2023.
Why Should You Invest for Tax Benefits?
It’s common for individuals to explore legitimate ways to lower their tax obligations. One of the most effective routes is through investment rebates under Section 78 of the Income Tax Act 2023. To benefit, you must invest in eligible instruments defined in the Act. Additionally, you can choose to donate a portion of your income to an approved area to get an investment tax rebate. Let’s explore the current list of recognized tax-saving options in Bangladesh.
Reduce Tax Through Investments - Eligible Investment Avenues for Tax Rebate
✅ 1. Life Insurance Premiums
Premiums paid for yourself, your spouse, and your minor children are eligible for claiming the investment tax rebate. However, the maximum amount is limited to 10% of the sum assured. [Ref: Para 2(1), Part 3 of 6th Schedule]
✅ 2. Shanchaypatra (Savings Certificates)
Investments up to Tk. 5 lakhs in Shanchaypatra or similar savings instruments qualify for investment tax rebate. Please be informed that investment in Shanchaypatra is considered one of the safest investments because it offers stable returns with very minimal risk. [Ref: Para 2(7)(a), Part 3 of 6th Schedule]
✅ 3. Deposit Pension Scheme (DPS)
Amount up to Tk. 120,000 invested annually in DPS will be considered as an investment to get investment tax rebate. [Ref: Para 2(7)(c), Part 3 of 6th Schedule]
✅ 4. Capital Market Investments
There’s no upper limit here! Whether you invest in primary IPOs or secondary shares, your entire investment is eligible for rebate. Moreover, under Clause 36 of Part 1 of 6th Schedule of Income Tax Act 2023 (inserted via Finance Act 2024), capital gains up to Tk. 50 lakhs are now completely tax-exempt. [Ref: Para 2(8), Part 3 of 6th Schedule]
✅ 5. Government Treasury Bills, Bonds, and Debentures
You can invest up to Tk. 5 lakhs in Government Treasury Bills, Bonds, and Debentures. Investment made in these secure instruments will enjoy tax benefits. [Ref: Para 2(7)(a), Part 3 of 6th Schedule]
✅ 6. SUKUK and Shariah-Compliant Securities
Tired of traditional interest-based investment options? Looking for alternatives aligned with Islamic finance principles?
If so, SUKUK and Shariah-compliant bonds could be the ideal choice for you. These investments not only adhere to Islamic financial ethics but are also fully eligible for tax rebates, provided they are listed with the Bangladesh Securities and Exchange Commission (BSEC). [Ref: Para 2(8), Part 3 of 6th Schedule]
✅ 7. Unit Certificates, Mutual Funds, and ETFs
You can claim a rebate for investments up to Tk. 5 lakhs with regard to the investment made in Unit Certificates, Mutual Funds, and ETFs. Those investment instruments are offered by various banks and merchant institutions. [Ref: Para 2(7)(b), Part 3 of 6th Schedule]
✅ 8. Bonds and Debentures (Listed)
Another option is investing in bonds or debentures listed with the Bangladesh Securities and Exchange Commission (BSEC).
The best part? There’s no upper investment limit. These instruments offer dual benefits: steady interest income over time and potential capital gains if sold at a higher price. [Ref: Para 2(8), Part 3 of 6th Schedule]
✅ 9. Investment in Universal Pension Scheme
Contributing to the Universal Pension Scheme also qualifies you for an investment tax rebate. According to SRO No. 295-Law/Income Tax-17-2023, dated 31 October 2023, any amount you invest in this scheme is eligible for tax benefits.
The best part? There’s no investment ceiling—you’re free to contribute as much as you like to build a secure retirement while enjoying tax savings. [Ref: Para 2(7)(d), Part 3 of 6th Schedule]
✅ 10. Recognized Provident Fund (RPF)
Contributions by both employer and employee to an NBR-approved RPF are considered tax purposes investment (excluding government employees). [Ref: Para 2(5), Part 3 of 6th Schedule]
✅ 11. General Provident Fund (GPF)
Applicable only to government employees, investments in GPF are also eligible for tax benefits. [Ref: Para 2(4), Part 3 of 6th Schedule]
✅ 12. Approved Superannuation Fund
Participation in such a fund allows you to enjoy tax savings on your contributions. [Ref: Para 2(6), Part 3 of 6th Schedule]
✅ 13. Approved Benevolent Fund and Group Insurance Premiums
Contributions to these employer-linked welfare funds are also considered tax-allowable investments. [Ref: Para 2(12), Part 3 of 6th Schedule]
Alternative to Investment: Donation for Tax Rebate
As an alternative to direct investments, you may choose to donate a portion of your income to approved sectors as recognized by the National Board of Revenue (NBR). According to Part 3 of the Sixth Schedule of Income Tax Act 2023, donations made to the following will qualify for an investment tax rebate:
- Donation to Charitable organizations;
- Donation to the approved hospitals;
- Donation to the approved organizations established for the welfare of physically challenged individuals; and
- Donation to the National-level institutions established in memory of the Liberation War.
Would you like a ready-made list of eligible donation options? Please consider donating to one or more of the following approved institutions:
- Donation to Zakat Fund;
- Donation to Muktijoddha Jadughar (Liberation War Museum);
- Donation to CRP, Savar;
- Donation to Ahsania Cancer Hospital;
- Donation to ICDDR,B;
- Donation to Asiatic Society of Bangladesh;
- Donation to Dhaka Ahsania Mission Cancer Hospital;
- Donation to Centre for Zakat Management (CZM);
- Donation to Bangladesh Thalassemia Foundation;
- Donation to Mastul Foundation;
- Donation to SOS Children’s Village International in Bangladesh;
- Donation to Rogi Kalyan Samity;
- Donation to Bangladesh National Federation of the Deaf (বাংলাদেশ জাতীয় বধির সংস্থা);
- Donation to Gonoshasthaya Kendra;
- Donation to Palliative Care Society of Bangladesh (PCSB);
- Donation to Agami Education Foundation;
Conclusion - Reduce Tax through Investments
Tax-saving investments are more than just financial strategies—they’re tools for future planning. Whether you’re risk-averse or growth-oriented, Bangladesh’s tax laws offer you a variety of compliant options to reduce Tax Through Investments. You can choose whatever you want.
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