TMI BlogExpenditure on Scientific Research - Section 35X X X X Extracts X X X X X X X X Extracts X X X X ..... nd on purchase of material used in research within the 3 years immediately preceding the year of commencement of business, shall be allowed as a deduction in the year in which business is commenced. However, salary paid before the commencement of business shall not be allowed. Revenue Expenditure incurred after commencement of business 100% of revenue expenditure laid out or expended on scientific research related to the business carried on by the assessee. Section 35(1)(ii ) An amount equal to 100% of any sum paid to research association which has as its object the undertaking of scientific research or to a university, college or other institution to be used for research provided such association/ university/ college/ institution is approv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch business is commenced. Notes: 1) No depreciation shall be allowed in respect of assets for which deduction has been claimed under section 35 . 2) It is not necessary that the assessee should carry out the research himself. If research is carried out by some other person for the business of the assessee, payment made to such other person will be treated as expenditure on research. 3) The set off and carry forward of unabsorbed research capital expenditure is in the same manner as that of depreciation. 4) If land and building is purchased through a composite agreement, then the cost of land and building shall be bifurcated on the basis of their FMV. Cost of the land is not allowable as deduction and cost of building shall be allowed as ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreement with prescribed authority 1 for cooperation in such research development facility and for audit of accounts maintained for such facility or fulfills such conditions with regard to maintenance of accounts and audit thereof and furnishing of reports in such manner as may be prescribed. Deduction shall also be allowed for expenditure incurred on clinical drug trials obtaining approvals from regulatory authority and for filing an application for a patent under the Patent Act in case of a company doing scientific research in drugs and pharmaceuticals. Cost of land is not allowed as deduction. Cost of building shall be allowed under section 35(1)(iv) @ 100%. Revenue and capital expenditure allowable under section 35(2AB) @ 100%. Amendme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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