Contribution to Approved Institutions to carry on Research is Allowed as Weighted Deductions for Calculating Profits and Gains of Business or Professions

 

(B-I) Research Carried On By Any Other Agency, Body, University, College Etc. And Financed By Assessee [Section 35(i),(ii),(iii)]

Where the assessee is not performing research activities himself but gives money to other institutions to carry on research, a weighted deduction is allowed as under—

1. If amount is given to an approved research association, research may be related or unrelated to assessee’s business, a weighted deduction @ 175% of actual expenditure shall be allowed.

2. If amount is given for research to an approved university, college or other institution and research may or may not be related to assessee’s business, a weighted deduction @ 175% of actual expenditure shall be allowed.

3. In case amount is given for research to an approved association the objective of which is to undertake research in the field of social sciences or statistical research or amount is given to an approved university, college or other institution for research in social sciences or statistical research, a weighted deduction @ 125% of actual expenditure shall be allowed. Such research may or may not be related with assessee’ s business.

(B-2) Contribution to National Laboratory [Sec. 35(2AA)]

A higher weighted deduction @ 20O% of actual amount given shall be allowed if amount is given to following institutions under a specific direction that the amount so received is to be used for undertaking scientific research programme approved by the prescribed authority. Weighted deduction is allowed if the following institutions are approved at the time of making the payment.

These institutions are :

(I) National Laboratory.

(ii) A University.

(iii) Indian Institute of Technology.

(iv) A Specified person as approved by the prescribed authority.

(B-3) Weighted Deduction for a sum of money given to a company for Scientific Research [Section 35(i)(iia)]

In case any assessee provides money to an Indian company engaged in the scientific research and approved for this purpose, a weighted deduction @ 125% of the amount paid shall be allowed. Research carried on by the company may or may not be related to donor assessee’s business.

Conditions :

(i) The company is registered in India.

(ii) The main object of the company is scientific research and development.

(iii) The company is an approved scientific research company by the prescribed authority.

(B-4) Carry forward and set-off of capital expenditure on scientific research

Capital expenditure on research is allowed to be debited to the Profit and Loss Account in full but in case profit is insufficient to absorb full amount of capital expenditure then the same shall be allowed to be set-off out of inccme of any other head except salary income and if any part of capital expenditure still remains unadjusted the same shall be allowed to be carried forward and set-off in future years as if it is an unabsorbed depreciation.

 
 

More Topics .... " Business or Profession"
Definition of the Head ' Business or Profession'-[Sec.-28]
Compensation Received as Business Income(Section-28(ii))]
Income of a Trade or Professional Association [Section 28(iii)]
Income from Export Incentives is chargeable to Income Tax
Any Amount Received Under certain Agreement for not to Carry on Business [Section 28(va)]
Speculation Business [Explanation to Section 28]
Profit Earned from an Illegal Business
Transfer of certain Assets Specified u/s 35AD in certain circumstances [Section 28(vii)]
Certain Incomes relating to business but not taxable under the head ‘Profits Gains of Business or Profession .
Computation of Income of Business or Profession - General Important Points
General Principles - for Deductions Allowed from Gross Income of Business and Professions
Deductions from Gross Income of Business or Profession [ Section 30 to 44DB]
Expressly Admissible Deductions from Gross Income from Business or Profession [Section 30-36]
Expenditure Incurred in the Field of Scientific Research [Section 35]
Expenses on Research Activities carried on by the assessee himself
Contribution to Approved Institutions to carry on Research is Allowed as Weighted Deductions for Calculating Profits and Gains of Business or Professions.
Expenditure incurred on the acquisition of Patents Rights or Copy Rights [Section 35A] [Applicable for expenditure incurred before 1-4-1998]
Expenditure on know-how [Section 35 AB] [Applicable for expenditure incurred before 1-4-1998]
Expenditure for obtaining License to operate Telecommunication Services [Section 35 ABB]
Expenditure on eligible projects or schemes [Section 35 AC]
Deduction in respect of expenditure incurred on setting up of a Specified Business [Sec. 35AD]
Any amount given to an institution or association [Section-35CCA]
Expenditure on Notified Agricultural Extension Project [Section-35 CCC] [w.e.f. A.Y. 2013-14]
Expenditure on Notified Skill development project [Section-35 CCD] [w.e.f. A.Y. 2013-14]
Amortisation of Certain Preliminary Expenses [Section 35D]
Expenditure on demerger or amalgamation [Section 35DD]
Amortisation of Expenditure Incurred Under Voluntary Retirement Scheme [Section 35DDA]
Expenditure on Prospecting etc., for certain Minerals [Section 35E]
Other Deductions Allowed to Compute Income from Business or Profession   [Section-36]
Interest on Borrowed Capital [Sec. 36(1)(iii)].
Deduction of discount on Zero Coupon Bond [Section 36(iiia)]
Contribution to Provident and Superannuation Fund [Sec. 36(1)(iv)].
Employee’s contribution towards staff welfare schemes [Sec. 36(1)(va)]
Bad debts [Sec. 36(1)(vii)]
Bad debts of Banks, financial institution and industrial investment corporation etc. [Section 36(1)(viia)]
Special Reserve Created and Maintained by Financial Corporation [Section 36(1)(viii)].
Expenditure on Family Planning [Section-36(1)(ix)].
General Or Allowable Deductions [Section 37]
Commission earned by the agents of Life Insurance Corporation, Unit Trust of India, Post Office or Mutual Funds
Legal Expenses in the Interest of Business are Allowable Expenses
Losses incidental to Business Allowed to be Debited.
Expenses Expressly Disallowed In the Case of any ‘Assessee’ [ Section-40a]
Expenses Expressly Disallowed In the Case of any Firm [Section 40(b)]
Expenses Expressly Disallowed In General Cases [Section 40(b)]
Disallowing of certain Expenses under certain circumstances like ‘Payments to Relatives’
Payments exceeding ` 20,000 by cash/bearer cheque [Section 40A (3)].
Provision for the Payment of Gratuity – [Section-40A(7)]
DEEMED PROFITS Under Profits and Gains of Business or Professions [Section 41]
VALUATION OF STOCK for Profit and Gains of Business or Professions
Deduction Of Certain Payments Only If Actually Paid [Section 43B]
Maintenance Of Accounts By Certain Persons Carrying On Profession Or Business. [Sec. 44AA]
Compulsory Audit For The Non-Corporate Assessees [Section-44 AB]
Computation of Income on Estimated Basis [Section 44AD]
Profit from the business of carriage of goods for truck owners [Section 44 AE]
Special provision for computation of income from royalties in case of nonresidents [Section 44DA]
Partly Agricultural and Partly Business Income
Adjustment In The Profit And Loss A/C Prepared By The Assessee
Computation of Profits and Gains of a Non-Resident from Shipping Business— [Section 44B]
Computation of Profits and Gains of business of Oil Exploration [Section 44BB]
Computation of Profits and Gains of the Business of operation of Aircrafts by Non-Resident [Section 44 BBA]
Computation of Profits of Foreign Enterprises [Section 44BBB]
Ceiling Limits in respect of Head Office Expenses [Section 440]
Special Provisions in case of Income of Public Financial Institutions etc. [Section 43D]
 
 
Get.. Tally.ERP9 Book + GST Practical Assignment @ Rs.550 Tally.ERP9 Book Online Order Tally.ERP9 Book Content
 
© 2018 : IncomeTaxManagement