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Rule 30: Scientific research programme approval

Rule 30 identifies the authority, forms, timelines and continuing conditions for approval of a scientific research programme under section 45(3)(c). The sponsor and research institution have different responsibilities throughout the programme.

Official notified Income-tax Rules, 2026

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Rule 30 - Prescribed authority and process of approval for expenditure on scientific research under section 45(3)(c)

(1) For the purposes of section 45(3)(c)(i) to (iii), the head of the National Laboratory or the University or the Indian Institute of Technology, as the case may be, shall be the prescribed authority.

(2) For the purposes of section 45(3)(c)(iv), the Principal Scientific Adviser to the Government of India shall be the prescribed authority.

(3) The application for obtaining approval of scientific research programme under section 45(3)(c) shall be made by a sponsor in Form No. 7.

(4) The prescribed authority shall, if he is satisfied that it is feasible to carry out the scientific research programme then, subject to other conditions specified in this rule, pass an order in writing in Form No. 8, approving such programme within two months from the end of the month in which application is received, to be effective for such period not exceeding five tax years.

(5) For the purposes of sub-rule (4), the Principal Scientific Adviser to the Government of India may authorise an officer, not below the rank of a Deputy Secretary, to issue such order, after the scientific research programme has been approved by him.

(6) A reasonable opportunity of being heard shall be granted to the sponsor before rejecting an application.

(7) Approval of a scientific research programme under section 45(3)(c) shall be subject to the following conditions:— (a) the programme should not relate purely to market research, sales promotion, quality control, testing, commercial production, style changes, routine data collection or activities of a like nature; (b) the National Laboratory, University, Indian Institute of Technology or specified person, as the case may be, shall maintain a separate account for each approved programme; (c) the account shall be audited annually and a copy thereof shall be furnished to the Chief Commissioner of Income-tax having jurisdiction over the sponsor on or before the due date specified in section 263(1)(c) for furnishing the return of income, for each succeeding tax year; (d) the following information or statement or report shall be submitted to the Chief Commissioner of Income-tax having jurisdiction over the sponsor:–– (A) a report in Form No. 10 by the prescribed authority within a period of three months from the date of granting approval to the programme showing progress of implementation of the approved programme and actuals of expenditure incurred thereon, by the sponsor and the National Laboratory, University, Indian Institute of Technology or specified person, as the case may be; (B) a completion certificate along with a copy of the report on the research activities carried out and salient features of the result obtained and its further application for commercial exploitation, jointly by the sponsor and the National Laboratory, University, Indian Institute of Technology or specified person, on completion of the approved programme; (C) a copy of the audited statement of accounts for the approved programme, by the Head of the National Laboratory, University or Indian Institute of Technology or the Principal Scientific Adviser to the Government of India, within six months of the completion of the programme; (e) the prescribed authority shall not extend the duration of the programme or approve any escalation in costs; and (f) the assets acquired by the National Laboratory, University, Indian Institute of Technology or specified person, for executing the approved programme shall not be disposed of without the approval of the Chief Commissioner of Income-tax having jurisdiction over the sponsor.

(8) The National Laboratory, University, Indian Institute of Technology or specified person shall issue a receipt of payment for carrying out an approved programme of scientific research in Form No. 9.

(9) The sponsor, may, at least three months before the expiry of the effective period of the order passed under sub-rule (4), make an application to the prescribed authority for passing a fresh order.

(10) For the purposes of this rule, (a) ―audited‖ means the audit of accounts by an accountant, as defined in the section 515(3)(b); and (b) ―sponsor‖ means a person who makes an application in Form No. 7.

Introduction

The process concerns a particular approved programme. Keep application, approval, receipts, programme accounts and completion reports connected rather than treating a general research activity as approval of every expenditure.

Rule breakdown

Select the prescribed authority

For section 45(3)(c)(i) to (iii), the head of the National Laboratory, University or Indian Institute of Technology is the prescribed authority, as applicable. For clause (iv), the Principal Scientific Adviser to the Government of India is the prescribed authority.

The sponsor applies in Form No. 7. Identify the correct recipient and programme before selecting the authority; the rule does not give every institution authority to approve every programme.

Approval decision and effective period

If satisfied that the programme is feasible, and subject to the other conditions, the authority must pass the written Form No. 8 order within two months from the end of the month in which the application is received. The effective period must not exceed five tax years.

The sponsor must receive a reasonable opportunity of being heard before rejection. Under sub-rule (5), the Principal Scientific Adviser may authorise an officer at least of Deputy Secretary rank to issue the order after the Adviser has approved the programme. Issuing the order and approving the programme are distinct steps.

Exclude purely routine or commercial activities

The programme must not relate purely to market research, sales promotion, quality control, testing, commercial production, style changes, routine data collection or similar activities. Explain the proposed scientific research and its feasibility clearly.

The word “purely” is part of the condition. A programme description should identify the actual research instead of relying on a broad research-and-development label or treating every test as automatically ineligible without its context.

Maintain programme accounts and the reporting calendar

The research body or specified person must maintain a separate account for each approved programme and have it audited annually. The copy is furnished to the Chief Commissioner having jurisdiction over the sponsor by the return deadline referenced in sub-rule (7)(c). The quotation retains section 263(1)(c); check the current Act and applicable deadline when scheduling the filing.

The prescribed authority submits Form No. 10 within three months of approval, covering progress and actual expenditure as described. On completion, the sponsor and research body jointly provide the completion certificate and research-results report. The identified head or Adviser submits the audited programme accounts within six months of completion.

Changes, assets and a fresh order

The prescribed authority may not extend programme duration or approve cost escalation under sub-rule (7)(e). Assets acquired by the research body or specified person for the programme must not be disposed of without the approval of the sponsor’s jurisdictional Chief Commissioner.

Sub-rule (9) separately permits the sponsor to apply for a fresh order at least three months before the existing order’s effective period expires. A timely fresh application is not an automatic extension or a guarantee of approval.

Receipt and an illustrative timetable

The research body or specified person issues the payment receipt in Form No. 9. Reconcile it to the sponsor’s payment and the particular approved programme.

Hypothetical: an application received on 12 June has an approval-order deadline measured as two months from the end of June, giving 31 August. If the approval is granted on 20 July, the Form No. 10 period runs from that approval date, rather than from the June application date. Track each event independently.

Key takeaways

Authority depends on the recipient

The head of the specified laboratory, University or IIT and the Principal Scientific Adviser have different statutory roles.

Programme-specific approval

Form 7 is the application and Form 8 the written approval, for a period not exceeding five tax years.

Separate accounts and reports

Annual audit, progress reporting, completion documents and asset-disposal controls continue after approval.

Practical checklist

  • Match the programme and recipient to the prescribed authority.
  • Maintain separate programme accounts and reporting dates.
  • Retain Form 8 approval, Form 9 receipts and completion evidence.

Avoid

  • Do not treat a fresh-order application as an automatic extension.
  • Do not ignore the prohibition on approving cost escalation.
  • Do not dispose of covered assets without the required approval.

FAQs

Who makes the programme application?

The sponsor, defined as the person making the application in Form No. 7.

Is five tax years an automatic approval period?

No. The order is effective for the specified period, which cannot exceed five tax years.

Can the authority simply extend the programme or increase approved costs?

Sub-rule (7)(e) says it shall not extend duration or approve cost escalation. A fresh order application is separately addressed by sub-rule (9).

Who provides the payment receipt?

The National Laboratory, University, IIT or specified person issues Form No. 9 for payment towards the approved programme.

Glossary

Sponsor
The person applying in Form No. 7 under this rule.
Fresh order
A new order sought through an application made at least three months before expiry of the effective period.
Audited account
An account audited by an accountant within the definition referenced in section 515(3)(b).

Official sources