Sanchayaptra limit exhausted? Where to make a tax investment?


“Tax Refund” or “Tax Investment” remain important considerations for service providers and business people during the month of June every year. People must invest before June 30 in products eligible for the tax reduction. Naturally, this is a time when advising people on which products are best suited for tax reductions will help them take action to maximize their tax reduction.

Although there are several avenues (more than 20) which constitute an investment eligible for the tax reduction, 5 to 6 products – National Savings Certificate (NSC) or Sanchaypatra, treasury bills, listed stocks and bonds, funds mutual funds, pension plan by deposit (DPS), Insurance, etc. – most suitable for individual investors.

Before investing in a certain product, it is important to understand how much one can invest in which product and what the tax refund would be. Indeed, there are investment limits for certain products, for example BDT 60,000 in case of DPS, BDT 50 Lac in case of Sanchaypatra, etc. Yet, with a guaranteed return and full tax eligibility, Sanchaypatra remains the best tax investment product till date.

However, in Sanchaypatra, an individual can invest a maximum amount of BDT 50 Lacs in a single account. Since a new investment is required each fiscal year to qualify for that year’s tax refund, investors who have already exhausted their Sanchaypatra limit should invest in other eligible products. Direct investment in the Secondary Shares is a qualifying investment which may offer maximum tax reimbursement, although the risk of capital loss makes it less profitable for investors. In such a situation, investors are naturally faced with the question: “Is there a safer alternative offering a maximum tax refund?”

In terms of “maximum tax rebate” and “investment security”, a “fixed income mutual fund” is the best fit. Although fixed income mutual funds have already made their mark as a globally popular and widely acclaimed financial instrument, they did not exist in Bangladesh until June 2021. June 2021 saw the establishment of the first ever mutual to Bangladesh fixed and variable income. Fund called IDLC Income Fund. By investing primarily in government securities (40% to 60%), this fund provides stability by maintaining an optimal balance between return, security and liquidity. Other avenues of investment are highly rated corporate bonds, FDRs in well-governed financial intermediaries, and IPOs. IDLC Income Fund is a much safer product because it DOES NOT INVEST IN THE SECONDARY STOCK MARKET. Thus, it offers a maximum tax refund as well as a regular and stable income.

With this intention and philosophy, within the first 6 months of launch, IDLC Income Fund paid a 3% cash dividend to its investors. In addition, the Net Asset Values ​​(NAVs) of the IDLC Income Fund have grown very steadily and consistently since inception, avoiding any volatility.

The yield of the Fund stands at 6.9% over 11 months (from June 24, 2021 to June 2, 2022) including a dividend of 3% which was paid on January 6, 2022 to investors as indicated above.

Being the safest investment path and its track record of performance, in a nutshell, IDLC Income Fund should be considered as the most suitable investment product to obtain maximum tax refund as well as stable and regular income. for the following periods.

For investors who have already exhausted their Sanchaypatra limit and are looking for a safer investment avenue for a tax refund, IDLC Income Fund might be the only safer choice.

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