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Deduction of amount
contributed to an association, university, college etc. carrying out
scientific research or social science research or statistical research:
Sec 35(1) (ii) provides that a deduction
equivalent to 125% (weighted deduction) of the amount donated to any
association, university, college etc. shall be available to the payee if
the following conditions are met:
- money
should be paid to a scientific research association/organization which
has as its objects , carrying out the scientific research or to a
university , college or other institution to be used for carrying out the
scientific research,
- Such
association/organization, university , college or other institution should
be duly approved in accordance with the guidelines and other conditions as
may be specified,
- Such
association/organization, university, college or other institution should
be specified by the notified in the official gazette of the Central Govt.
A similar weighted deduction of 125% of the
money paid is available to the organisations, including college,
university etc. who are carrying out Social Science research or
Statistical research u/s 35(1)(iii) of Income Tax act1961.
Once notified u/s 35(1) (ii) of IT act1961,
the income of these association are also exempt u/s 10(21) of IT act1961.
However, there are a set of rules which should be complied with by these
associations.
Looking carefully, the IT act envisages
scientific research associations who are only engaged in scientific
research activities. That is why a separate application form is prescribed
for these associations (3CF-I) In
case of other entities who are also engaged in other activities apart from
research such as college, university etc. the IT rules prescribes almost
same application for with different Form no. (in this case 3CF-II)
Form 3CF-I has one additional annexure
entitled Annexure which is to be furnished by those
scientific research associations who are also exempt u/s 10(21) of IT act.
The IT rules provide the working machinery
under rules 5C, 5D and 5F in IT rules 1962.
Format of application forms:
The application form should be in the
following format, valid for both sections i.e. 35(1) (ii) and (iii)-
-
By a scientific
research association - Form
3CF-I
-
By a university,
college or other institution - Form 3CF-II
The formats are enclosed herewith.
Where and when the application should be
made:
The application in the prescribed format
should be filed with in the financial year preceding the assessment year
for which the permission is sought.
The original application should be submitted
with the CIT/ DIT- IT of the jurisdiction of the assessee association. A
duplicate set of this application should be also furnished to the
Member(IT), CBDT, New Delhi along with a copy of the acknowledgement as
evidence that this set is already furnished to CIT/DIT(IT).
The CIT/DIT shall have to decide the
application with in a period of three months from the end of the month
when such application was submitted to them.
Period of approval u/s 35(1) (ii) /
(iii) of IT act1961
Now henceforth from 13th July 2006,
the approval is granted for infinite period unless it is revoked by the
Central Govt. Prior to 13th July 2006, the grant of approval
was for a period of three years.
Points of caution:
Following information needs to be filled up
carefully while making application:
- list
of assets / facilities owned used for scientific research / Social science
research by the applicant,
-
Details of past
research projects undertaken by the applicant, such as research projects
completed/ underway/ any publication of research projects,
- Past
research activities such as whether any new product/process developed,
approved, any product of import substitution,
- Patents
filed and details of the filing,
- Whether
any commercialization carried out of any such product/ process,
- Earnings
from such patents etc.
- Details
of conferences/ seminars etc. held
- Proposed
research project to be undertaken,
- List
of the donors and amount received as donations,
- Amount
utilized in such research activities, |
