Tax Incentives for Scientific Research: Clause 45 of the Income Tax Bill, 2025 vs. Section 35

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....amework for deductions related to expenditures on scientific research. This provision aims to encourage businesses to invest in research and development (R&D) by offering tax incentives. The clause is significant as it aligns with the government's broader agenda to promote innovation and technological advancement within the country. This article provides a comprehensive analysis of Clause 45, ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... it specifically excludes expenditures on land acquisition. This exclusion is consistent with past legislative practices to prevent the misuse of deductions for non-research-related asset acquisitions. Sub-section (2): Pre-commencement Expenditure Clause 45(2) permits deductions for expenditures incurred up to three years before the commencement of business, provided they are certified by the pr....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....se sub-sections address technical aspects such as the non-availability of deductions under other sections for the same expenditure, applicability of depreciation provisions, and the treatment of assets transferred during amalgamations. Practical Implications Clause 45 impacts various stakeholders, including businesses, research institutions, and tax authorities. Businesses need to maintain metic....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....esearch associations, universities, and approved companies, but Clause 45 provides a more streamlined approach without specifying different treatment for various entities. * Pre-commencement Expenditure: Both provisions allow deductions for pre-commencement expenditures, but Clause 45 provides a more detailed framework for certification and deemed expenditure. * Amalgamation Provisions: Clause....