So, you have availed the income tax benefits u/s 35(2AB) of the Income Tax Act? Congratulations, you saved a lot! But, hey, there is still one more step to follow before you sit back and relax: Filing of Form 3CL.
So, let’s understand from the start how it’s done. Every company after securing the d DSIR recognition (In-House R&D recognition), applies for DSIR approval for the income tax benefits u/s 35(2AB). Once the approval (i.e. FORM 3CM) is secured, a company avails the weighted 150% income tax benefit during the annual IT return filing. Btw, before filing the return, don’t forget to optimize your R&D expense as per DSIR guidelines. It is very usual for a company (mostly due to lack of clarity) to over-claim or under-claim the R&D expenses. So, make sure you have optimised your expenses well before claiming the DSIR tax benefits.
Once you have availed the said income tax benefits, you need to report the same to DSIR along with the relevant details (auditor certificate, appendix II to annexure IV etc.). How to do that? You need to file a FORM 3CL to DSIR and a FORM 3CLA (to be filed by your auditor) to DGIT. Bingo, you’re done! Now you may sit back and relax!
A word of caution : Please make sure you have a FORM 3CM (which is active and not expired) before you claim the 150% income tax benefit.