Section 35(2AB)

We are bio technology company engaged in processing seeds. We want to know that how much deduction is available for R&D expenses under section 35(2AB) for in house r&d expenses?? ??

mahesh Asked on August 24, 2018 in Taxations.
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1 Answer(s)

Do Check the same with Your accountant with all conditions to be met to claim the deductions . The Section is reproduced down here:-

(2AB)(1) Where a company engaged in the business of bio-technology or in any business of manufacture or production of any article or thing, not being an article or thing specified in the list of the Eleventh Schedule incurs any expenditure on scientific research (not being expenditure in the nature of cost of any land or building) on in-house research and development facility as approved by the prescribed authority61-62, then, there shall be allowed a deduction of a sum equal to 63[one and one-half] times of the expenditure so incurred:

64[Provided that where such expenditure on scientific research (not being expenditure in the nature of cost of any land or building) on in-house research and development facility is incurred in a previous year relevant to the assessment year beginning on or after the 1st day of April, 2021, the deduction under this clause shall be equal to the expenditure so incurred.]

Explanation.—For the purposes of this clause, “expenditure on scientific research”, in relation to drugs and pharmaceuticals, shall include expenditure incurred on clinical drug trial, obtaining approval from any regulatory authority under any Central, State or Provincial Act and filing an application for a patent under the Patents Act, 1970 (39 of 1970).

(2)  No deduction shall be allowed in respect of the expenditure mentioned in clause (1) under any other provision of this Act.

(3)  No company shall be entitled for deduction under clause (1) unless it enters into an agreement with the prescribed authority for co-operation in such research and development facility and fulfils such conditions with regard to maintenance of accounts and audit thereof and furnishing of reports in such manner as may be prescribed.

(4)  The prescribed authority shall submit its report in relation to the approval of the said facility to the Principal Chief Commissioner or Chief Commissioner or Principal Director General or Director General in such form and within such time as may be prescribed.

(5)  65[***]

(6)  No deduction shall be allowed to a company approved under sub-clause (C) of clause (iia) of sub-section (1) in respect of the expenditure referred to in clause (1) which is incurred after the 31st day of March, 2008.

TaxIQ Answered on August 27, 2018.
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