|
5. Amendment of section 35. |
|
|
—In section 35 of the Income-tax Act, with effect from the 1st day of April, 2009,—
(a) in sub-section (1), after clause (ii), the following clause shall be inserted, namely:—
"(iia) an amount equal to one and one-fourth times of any sum paid to a company to be used by it for scientific research:
Provided that such company—
(A) is registered in India,
(B) has as its main object the scientific research and development,
(C) is, for the purposes of this clause, for the time being approved by the prescribed authority in the prescribed manner, and
(D) fulfils such other conditions as may be prescribed;";
(b) in sub-section (2AB), after clause (5), the following clause shall be inserted, namely:—
"(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.".
Clause 5 seeks to amend section 35 of the Income-tax Act, which relates to expenditure on scientific research.
Clause (ii) of sub-section (1) of the said section allows deduction of an amount equal to one and one-fourth times of any sum paid to a scientific research association which has as its object the undertaking of scientific research or to a university, college or other institution to be used by it for scientific research. The provision also requires such scientific research association, university, college or other institution to be approved and notified for the purposes of said clause.
Further, sub-section (2AB) of the said section allows deduction of an amount equal to one and one-half times of the expenditure incurred on scientific re-search, not being expenditure in the nature of cost of any land or building, on approved in-house research and development facility. This deduction is available to a company engaged in the specified business.
The proposed amendment seeks to insert clause (iia) in sub-section (1) of the said section to allow deduction of an amount equal to one and one-fourth times of any sum paid to a company for scientific research, provided such company—
(A) is registered in India;
(B) has as its main object the scientific research and development;
(C) is, for the purposes of this clause, for the time being approved by the prescribed authority in the prescribed manner; and
(D) fulfils such other conditions as may be prescribed.
The proposed amendment further seeks to insert clause (6) in sub-section (2AB) of the said section to provide that no deduction shall be allowed to a company approved under sub-clause (C) of clause (iia) of sub-section (1) of the said section in respect of the expenditure referred to in clause (1) of sub-section (2AB) which is incurred after 31st March, 2008.
These amendments will take effect from 1st April, 2009 and will accordingly apply in relation to the assessment year 2009-10 and subsequent assessment years.
|
|
|
Case Look ups