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This paper solves the problem of optimal placement of shunt capacitors in the northern region of Bangladesh transmission network. During network augmentation event like very high inductive reactive load condition, the weakened voltage profile of the buses can be compensated by optimum allocation of the capacitor banks. In this regard, the aim of this problem is to minimise the costs associated with capacitor banks, transmission system losses and voltage profile improvement whilst satisfying various constraints. Mixed integer linear programming method is introduced for the discrete optimization problem of placing capacitors in transmission system for cost minimization and voltage profile improvement. In this proposed formulation, sensitivity dependent voltage magnitude is taken into account for the selection of candidate buses. It is also shown that voltage profile is linearly dependent on reactive load. Therefore, load modelling is done carefully to get a more realistic image of the overall outcomes. The proposed methodology yields integer number of capacitors of particular sizes to be placed on best suited buses. In addition, the proposed approach is applied to IEEE 39 bus system and 33 bus real transmission system of northern region of Bangladesh power system Furthermore, a thorough performance comparison with an existing state-of-the-art capacitor placement method is also performed for validation. The simulation results demonstrate that the proposed methodology is capable of producing optimized solution while successfully mitigating the low voltage issue. Moreover, the proposed approach shows enhanced voltage profile of the buses at a reduced reactive support size than the existing approach.