Approval of Scientific Research Programme under section 35(2A) of the Income-tax Act, 1961--Clarifications regarding - Income Tax - 294/1981

Approval of Scientific Research Programme under section 35(2A) of the Income-tax Act, 1961--Clarifications regarding Circular No. 294 Dated 27/2/1981 To All Commissioners of Income-tax. Sir, Subject : Approval of Scientific Research Programme under section 35(2A) of the Income-tax Act, 1961--Clarifications regarding. Section 35(2A) of the Income-tax Act, 1961, provides that where the assessee pays any sum to a scientific research association for university or college or other institution referred to in section 35(1)(ii) or to a public sector company to be utilised for scientific research undertaken under a programme approved in this behalf by the prescribed authority having regard to the social, economic and industrial needs of India, then, there shall be allowed a deduction of a sum equal to 1-1/3 times the sum so paid. 2. Notifications under section 35(2A) are issued by the Ministry of Finance on the basis of the recommendation of the prescribed authority, containing, inter alia, the details of the research programme, the name of the sponsors, the name of the institution conducting the research and the total estimated cost of the project of the research programme. A question has been raised as to whether in a case where research programme has already been approved and notified payments made by persons other than the original sponsors mentioned in the notification to the research programme can also qualify for weighted deduction or not. The Board have been advised that the approval under section 35(2A) is of the "research programme" and not of the sponsors and, therefore, any other person the original sponsors making payments to the approved research programme can also claim the benefit of weighted deduction provided the amount collected from all the sponsors do not exceed the cost of the particular programme approved by the prescribed authority. However, before allowing the weighted deduction, the ITO shall call for from the sponsor/contributor a certificate issued by the research association/institution certifying, inter alia, the amount actually paid by the sponsor/contributor to the research programme as approved and mentioned in the notification and also certifying that the total contribution received from all the sponsors/contributors do not exceed the cost of the programme as approved by the prescribed authority. 3. The above clarifications may be brought to the notice of all the officers working in your charge. Yours faithfully, (Sd.) M.K. Pandey Secretary, Central Board of Direct Taxes.