Provisions of Section 35(1)(i) and Section 35(1)(ii) of the Income Tax Act 1961, carry benefit with it, for the person who spend an amount towards Scientific Research whether carried out in own business or in any association like colleges, Universities or institutions etc. Because the person can claim benefit in while paying the income tax up to the total amount spent for this purpose. For availing benefit of the above mentioned sections, firstly a person have to take Registration under the Income Tax Act 1961.
Form 3CF-I, By a university, college or other institution - Form 3CF-II Annexure to application Form No. 3CFI shall be filled out if association claims exemption under section 10(21).
The application shall be made at any time during the financial year immediately preceding the assessment year for which approval is sought.
The application shall be made to the Commissioner of Income-tax or the Director of Income-tax having jurisdiction over the applicant. In addition, the application must send a copy of the application to Member (IT), CBDT accompanied by the acknowledgement receipt as evidence of having furnished the application form to the jurisdictional Commissioner/Director of Income-tax.
If the applicant fails to remove the deficiency within the period of thirty days so allowed, the Commissioner of Income-tax or, as the case may be, the Director of Income-tax shall send his recommendation for treating the application as invalid to the Member (IT), Central Board of Direct Taxes.
If the application Form is complete in all respects, the Commissioner of Income-tax or, as the case may be, the Director of Income-tax, may make such inquiry as he may consider necessary regarding the genuineness of the activity of the association or university or college or other institution and send his recommendation to the Member (IT) for grant of approval or rejection of the application before the expiry of the period of three months to be reckoned from the end of the month in which the application Form was received in his office.
- What is section 35(1)(i) and 35(1)(ii)?
These are the sections of Income Tax Act 1961,which benefit is available for a person who spend money on scientific research whether in own business or in other’s business of scientific research.
- What is the benefit of these Sections?
A person can claim exemption of all the expenses incurred in previous year spent on scientific research whether carried out in own business or in any association like colleges, Universities or institutions etc.
- Can all the expense of scientific research be exempt from Income Tax Under 35(1)(i) and 35(1)(ii)?
If any amount is spent for scientific research in a previous year can be fully claimed as exemption and if any amount incurred for the purpose of scientific research like purchase of Raw material, Salary or wages of the staff etc.then it can also be claimed as exemption for last 3 years preceeding the previous year can be climed as exemption in full.
- What is the comunity benefit?
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- Is 100% of the amount given to other institution allowed as exemption under sec. 35(1)(ii)?
Yes, 100% of the amount given to other institution allowed as exemption under sec. 35(1)(ii).