Executive Summary:
This notification announces the Central Government's approval of the Indian Institute of Science Education and Research, Bhopal, under Section 35 of the Income-tax Act, 1961. This approval, effective from the assessment year 2018-2019, allows donors to claim tax benefits for contributions to the institute's scientific research. The institute must adhere to specific conditions regarding the use of funds, maintenance of accounts, and reporting.
Key Points / Main Content:
Approval and Scope:
* The Indian Institute of Science Education and Research, Bhopal, is approved under Section 35(1)(ii) of the Income-tax Act, 1961.
* The approval is effective from the assessment year 2018-2019.
Conditions for Approval:
* Donations must be used for scientific research.
* Research must be conducted by faculty members or enrolled students.
* Separate, audited books of accounts must be maintained for research funds.
* An audit report, signed by an accountant, must be furnished to the Commissioner of Income-tax or the Director of Income-tax by the due date for filing income tax returns under section 139(1).
* A separate statement of donations received and amounts applied for scientific research, certified by the auditor, must accompany the audit report.
* A statement detailing research work, publications, patents, and future research plans must be furnished to the Commissioner of Income-tax or Director of Income-tax by the due date for filing income tax returns under section 139(1).
Grounds for Withdrawal of Approval:
* Failure to maintain separate books of accounts.
* Failure to furnish the audit report.
* Failure to furnish the statement of donations and their application.
* Cessation of research activities or findings that activities are not genuine.
* Failure to comply with Section 35(1)(ii) of the Income-tax Act and Rules 5C and 5E.
Impact Analysis:
Indian Institute of Science Education and Research, Bhopal:
* Impact: The institute is now recognized for tax-exempt donations towards scientific research, contingent upon meeting specified conditions.
* Action Required: Maintain separate accounts, conduct audits, and furnish reports and statements as required by the notification.
Donors to the Indian Institute of Science Education and Research, Bhopal:
* Impact: Donations to the institute for scientific research are eligible for tax benefits under Section 35 of the Income-tax Act, 1961.
* Action Required: Ensure that donations are used for scientific research purposes to claim tax benefits.
Commissioner of Income-tax or the Director of Income-tax:
* Impact: Responsible for overseeing the institute's compliance with the conditions of the approval.
* Action Required: Receive, review, and verify the audit reports and statements furnished by the institute.
Central Government:
* Impact: Responsible for monitoring the activities of the approved organization and has the authority to withdraw approval if conditions are not met.
* Action Required: Review the institute's compliance and take action if any violations are observed.
Key Entities Referenced
New Delhi: The city from which the notification was issued.
Ministry of Finance: The ministry under which the Department of Revenue and Central Board of Direct Taxes operate.
Department of Revenue: The department within the Ministry of Finance responsible for revenue collection.
Central Board of Direct Taxes: The authority issuing the notification.
Indian Institute of Science Education and Research, Bhopal: Organization approved by the Central Government under Section 35 of the Income-tax Act, 1961.
Income-tax Act, 1961: The primary legislation governing income tax in India, which includes provisions for deductions related to scientific research.
Incometax Rules, 1962: The rules framed under the Income-tax Act, 1961, providing detailed procedures and guidelines for implementing the Act's provisions; specifically Rules 5C and 5E are relevant.
Section 35 of the Income-tax Act, 1961: The section of the Income-tax Act that allows for deductions for contributions made to organizations engaged in scientific research.
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EXTRAORDINARY
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आयकर आयु!त अथवा आयकर िनदशे क को 0< तुत करेगा;
1711 GI/2019 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(ii)]
(iv) अनमु ो(cid:1)दत संगठन वै;ािनक अनुसंधान के िलए 0ाB त दान तथा 0यु!त रािश का अलग िववरण रखेगा और इस 0कार के
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(ग) पैरा[ाफ 1 के उप-पैरा[ाफ (iv) म2 यथा उि(cid:3)ल िखत वै;ािनक अनुसधं ान के िलए 0ाB त दान एवं 0यु! त धनरािश का
िववरण 0<त ुत करन ेम2 असफल रहता ह;ै अथवा
(घ) अपन े अनुसधं ान काय (cid:10)कलाप= को करना बंद कर देता ह ैअथवा इसके अनसु ंधान काय(cid:10) कलाप= को वा< तिवक नह] पाया
जाता ह;ै अथवा
(ड.) उ!त िनयमावली के िनयम 5ग और 5ड. के साथ प*ठत उ!त अिधिनयम क(cid:17) धारा 35 क(cid:17) उपधारा (1) के खंड (ii) के
0ावधान= के अनLु प नह] ह ैतथा उनका पालन नह] करता ह।ै
[अिधसूचना स.ं 18/2019/फा. सं. 203/07/2018-आ.क.िन.-।।)]
राजाराजे^री आर., अवर सिचव
MINISTRY OF FINANCE
(Department Of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 13th March, 2019
S.O. 1353 (E).—It is hereby notified for general information that the organization M/ s Indian Institute of
Science Education and Research, Bhopal (PAN:- AAAAI2511F) has been approved by the Central Government for
the purpose of clause (ii) of sub-section (1) of section 35 of the Income-tax Act, 1961 (said Act), read with Rules 5C and
5E of the Income-tax Rules, 1962 (said Rules), from Assessment year 2018--2019 onwards in the category of
‘University, College or other Institution’, engaged in research activities, subject to the following conditions, namely:-
(i) The sums paid to the approved organization shall be used to undertake scientific research;
(ii) The approved organization shall carry out scientific research research through its faculty members or enrolled
students;
(iii) The approved organization shall maintain separate books of accounts in respect of the sums received by it for
scientific research, reflect therein the amounts used for carrying out research, get such books audited by an
accountant as defined in the explanation to sub-section (2) of section 288 of the said Act and furnish the report
of such audit duly signed and verified by such accountant to the Commissioner of Income-tax or the Director of¹Hkkx IIµ[k.M 3(ii)º Hkkjr dk jkti=k % vlk/kj.k 3
Income-tax having jurisdiction over the case, by the due date of furnishing the return of income under sub-
section (1) of section 139 of the said Act;
(iv) The approved organization shall maintain a separate statement of donations received and amounts applied for
scientific research, such donations shall be used exclusively for core scientific research and a copy of such
statement duly certified by the auditor shall accompany the report of audit referred to above.
(v) The approved organization shall, by the due date of furnishing the return of income under sub-section (1) of
section 139, furnish a statement to the Commissioner of Income-tax or Director of Income-tax containing-
• a detailed note on the research work undertaken by it during the previous year;
• a summary of research articles published in national or international journals during the year;
• any patent or other similar rights applied for or registered during the year;
• programme of research projects to be undertaken during the forthcoming year and the financial
allocation for such programme.
2. The Central Government shall withdraw the approval if the approved organization:-
(a) fails to maintain separate books of accounts referred to in sub-paragraph (iii) of paragraph 1; or
(b) fails to furnish its audit report referred to in sub-paragraph (iii) of paragraph 1; or
(c) fails to furnish its statement of the donations received and sums applied for scientific research referred to
in sub-paragraph (iv) of paragraph 1; or
(d) ceases to carry on its research activities or its research activities are not found to be genuine; or
(e) ceases to conform to and comply with the provisions of clause (ii) of sub-section (1) of section 35 of the
said Act read with rules 5C and 5E of the said Rules.
[Notification No. 18/2019/F. No.203/07/2018/ITA-II]
RAJARAJESWARI R., Under Secy.
Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064
and Published by the Controller of Publications, Delhi-110054.