TaxTMI 
TaxTMI 
TaxTMI 
Guidance Note - Form 11
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....uidance Note - Form 11 <br>Income Tax<br>Dated:- 25-3-2026<br><BR>Proposed FORM 11 is the statutory application and agreement framework governing approval of in-house research and development (R&D) facilities maintained by companies under section 45(2) of the Income-tax Act, 2025. The form facilitates cooperation between the company and the Department of Scientific and Industrial Research (DSIR) a....
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....nd establishes the compliance architecture for in-house R&D incentives. 2. Legislative Framework Section 45(2) of the Income-tax Act, 2025 provides for deduction in respect of expenditure incurred by a company on an approved in-house research and development facility. Rule 29 of the Income-tax Rules prescribes the procedure, conditions and forms for approval, audit and reporting. FORM 11 ope....
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....rationalises the agreement and approval stage for in-house R&D facilities. 3. Scope and Applicability FORM 11 applies to companies: • engaged in biotechnology, or • engaged in manufacture or production of eligible articles or things (other than those specified in the Thirteenth Schedule), which maintain or propose to maintain an in-house R&D facility and seek app....
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....roval under section 45(2). 4. Structure of FORM 11 FORM 11 comprises the following components: Part A - Particulars of the Company Captures details of: • corporate identity and jurisdiction; • nature of business and products; • production and R&D expenditure history; • existing in-house R&D facilities and DSIR recognition; ....
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.... • proposed scientific research objectives. Part B - Agreement with DSIR Sets out the terms of cooperation between the company and DSIR, including: • maintenance of approved in-house R&D facility; • audit and reporting obligations; • cooperation in research activities; • submission of DSIR reports to tax authorities. Part C ....
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....- Declaration and Undertaking Contains binding undertakings by the company relating to: • maintenance and audit of accounts; • furnishing of audited statements with the return of income; • submission of progress reports and annexures; • restrictions on disposal of assets; • compliance with statutory and agreement conditions.....
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.... Annexure I and Annexure II provide for detailed facility-wise and expenditure-wise information to be submitted annually. 5. Role of DSIR DSIR functions as the prescribed authority for evaluation and oversight of in-house R&D facilities. Upon satisfaction regarding feasibility and genuineness of expenditure, DSIR submits its reports to the jurisdictional Chief Commissioner of Income-tax w....
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....ithin the prescribed time. 6. Nature and Effect of Approval Approval under FORM 11 : • is facility-specific; • is subject to continued compliance with section 45(2) and Rule 29; • does not automatically result in allowance of deduction. Deduction is allowable only upon verification of compliance at the time of processing or assessment. 7. Post-App....
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....roval Compliance Obligations Following approval, the company must: • maintain separate audited accounts for capital and revenue R&D expenditure; • submit annual progress and expenditure reports; • attach audited R&D accounts with the return of income; • ensure assets are used exclusively for approved purposes; • furnish requisite ....
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....information in Annexure I and Annexure II annually. 8. Distinction from Sponsored Research Forms FORM 11 operates in a distinct regime relating to in-house R&D facilities under section 45(2), whereas Forms 7 to 10 apply to sponsored scientific research programmes under section 45(3)(c). 10. Conclusion FORM 11 is a foundational instrument in the in-house R&D incentive framework under th....
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....e Income-tax Act, 2025. Companies seeking benefit under section 45(2) must ensure accurate filing, strict adherence to agreement terms and continuous compliance to safeguard eligibility for deduction. =============<BR> News - Press release - PIB....