How to file form 3CL with DSIR?

As the deadline for filing your R&D Expenditure (Form 3CL) with DSIR is approaching soon for financial year 2018-2019 it is time you gear up for the same.

Section 35(2AB) of the Act provides weighted tax deduction of 150% of expenditure incurred by a company, on scientific research (not being expenditure in the nature of cost of any land or building) in the in- house R&D centres as approved by the prescribed authority.

The Department of Scientific and Industrial Research (DSIR) has recently updated the guidelines for approval of in-house research and development (R&D) centres and submission of prescribed report under section 35(2AB) of the Income-tax Act, 1961 (the Act). Section 35(2AB) of the Act.

Upon receiving recognition from DSIR as IN-HOUSE R&D UNIT, companies are eligible for definite tax benefits u/s 35 (2AB). To avail these benefit, filing of form 3CL is mandatory. The cutoff date for the documents to be submitted for availing 3CL benefits is 31st October of each preceding financial year of approved period to facilitate submission of Report in Form 3CL.

Required information to be filled in form 3CL

  1. Name and Address of the registered company including Telex/Fax/Phone numbers
  2. Permanent Account Number (PAN) of the company Name and designation of the Principal Officer of the company.
  3. Nature of Business, manufacturing details of products Drugs like Pharmaceuticals, Electronic Equipment or any other article or thing notified under sub-section (2AB) of section 35.
  4. Annual production of the eligible products of the company during the past three years.
  5. Proposed objectives of scientific research contemplated by the company.
  6. Whether the nature of the business is related to the proposed objectives of the scientific research contemplated by the company.
  7. Details of the nature of in-house R&D facilities.
  8. Whether recognition granted to the in-house R&D centre of the company by DSIR.
  9. Total cost of in-house research facility, giving break-up of expenditure on land and buildings.
  10. Agreement for co-operation, R&D facility, audit of the accounts maintained for that facility.

 Along with it, documents like Auditor’s Certificate, complete details as per appendix II to annexure IV of DSIR guidelines are required as well.

 FORM 3CL is needed to be filed to DSIR and a FORM 3CLA (to be filed by the auditor) to Director General of Income Tax.

 With this, the process of availing the income tax benefits is completed!