(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.
(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.