The existing testability allocation methods exist some unreasonable problems, such as the allocation index is too low or too high. The reason is that those methods apply linear allocation function which is not consistent with testability index. Therefore, a novel allocation function based on inverse tangent function was constructed, and the allocation algorithm of fault detection rate and fault isolation rate was presented. The comparative analysis among the proposed method and the classic fault rate allocation and comprehensive weighted allocation methods shows the superiority of the method proposed. With the increase of the allocation weight (fault rate), the amplification of allocation index gradually decreases, and there will be no unreasonable allocation index which is either too low or higher than 1.