Mr. Aman has furnished the following particulars relating to payments made and expenditure incurred towards scientific research for the year ended…

CA Intermediate · Taxation · MTP · September 2024
Mr. Aman has furnished the following particulars relating to payments made and expenditure incurred towards scientific research for the year ended 31.3.2024: Sl. No. Particulars ₹ (in lakhs) (i) Payment made to AB University, an approved University 15 (ii) Payment made to Siya College 17 (iii) Payment made to IIT, Bangalore (under an approved programme for scientific research) 12 (iv) Machinery purchased for in-house scientific research 25 Compute the deduction available under section 35 of the Income-tax Act, 1961 for A.Y. 2024-25, while computing his income under the head "Profits and gains of business or profession” under default tax regime under section 115BAC.

Suggested Answer and Working Notes:

Second alternative Computation of deduction allowable under section 35 Particulars Amount (in lakhs) Section % of deduction Amount of deduction (in lakhs) Payment for scientific research AB University, an approved University 15 35(1)(ii) Nil Nil Siya College 17 - Nil Nil IIT Bangalore (under an approved programme for scientific research) 12 35(2AA) Nil Nil In-house research Capital expenditure – Purchase of Machinery 25 35(1)(iv) r.w. 35(2) 100% 25 Deduction allowable under section 35 25 Deduction under section 35(1)(ii) and 35(2AA) is not allowable under default tax regime under section 115BAC.

Topics: Paper 3A: Income Tax Laws, Paper 3B: Goods and Services Tax

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