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Rule 32Published

Rule 32: Form 17 research approval procedure

Rule 32 sets the Form No. 17 approval procedure under section 45(4)(b), including application timing, deficiency correction, decision periods, hearing rights and notification duration.

Official notified Income-tax Rules, 2026

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Rule 32 - Procedure, form and manner in respect of approval under section 45(4) read with section 45(3)(a) for deduction for expenditure on scientific research by a research association

(1) An application for approval under section 45(4)(b) in Form No. 17 shall be made to the Commissioner of Income-tax having jurisdiction over the applicant, at any time during the financial year immediately preceding the tax year from which the approval is sought.

(2) Where approval is sought— (a) from the tax year 2026-2027; or (b) from the tax year in which the applicant is incorporated, the application for approval may be made at any time during the said tax year.

(3) The person who is authorised to verify the return of income under section 265, as applicable to the applicant shall verify Form No. 17.

(4) If the research association claims an exemption as per Schedule III [Table: Sl. No. 23], then the Annexure to Form No. 17 shall also be filled out.

(5) The applicant shall send a copy of the application to Member (IT), Central Board of Direct Taxes accompanied by its acknowledgement receipt as evidence of having furnished the application as per sub-rule (1).

(6) Where an application is made under sub-rule (1), every notification under section 45(4)(b) shall be issued or an order rejecting the application shall be passed by the Central Government recording reasons therefor in writing, within twelve months from the end of the quarter in which such application was received in the office of Member (IT), CBDT.

(7) Any notification issued by the Central Government under section 45(4)(b) shall, at any time, have effect for such tax year or years, not exceeding five tax years as may be specified in such notification.

(8) If any defect is noticed in the application, or if any relevant document is not attached thereto, the Commissioner of Income-tax shall serve a deficiency letter on the applicant before the expiry of one month from the end of the month in which application is received in his office.

(9) The applicant shall remove the deficiency referred to in sub-rule (8) within a maximum period of one month from the end of the month in which the deficiency letter is served and if the applicant fails to remove such deficiency within the period so allowed, the Commissioner of Income-tax shall send his recommendation for treating the application as invalid to the Member (IT), Central Board of Direct Taxes.

(10) The Central Government, if satisfied, may pass an order, for reasons to be recorded in writing, treating the application as invalid.

(11) If the application is complete in all respects, the Commissioner of Income-tax, may make such inquiry as he may consider necessary regarding the genuineness of the activity of the research association or University or college or other institution and send his recommendation to the Member (IT), CBDT for grant of approval or rejection of the application before the expiry of the period of three months from the end of the quarter in which the application was received in his office.

(12) The Central Government may, before granting approval under section 45(4)(b), call for such documents or information from the applicant as it may consider necessary and may get any inquiry made for verification of the genuineness of the activity of the applicant.

(13) The Central Government may withdraw the approval granted under section 45(4)(b), if it is satisfied that the research association or University or college or other institution has ceased its activities, or its activities are not genuine, or are not being carried out in accordance with all or any of the conditions specified under rule 33 or rule 34.

(14) No order treating the application as invalid, or rejecting the application or withdrawing the approval, shall be passed without giving a reasonable opportunity of being heard.

(15) A copy of the order invalidating or rejecting the application or withdrawing the approval shall be communicated to the applicant, the Assessing Officer and the Commissioner of Income-tax having jurisdiction over the applicant.

(16) The applicant, may, at least three months before the expiry of the effective period of the notification issued under sub-rule (6), make an application to the Commissioner of Income-tax having jurisdiction over the applicant for issue of a fresh notification.

Rule breakdown

Apply in the correct period

The general rule is an application in Form No. 17 to the jurisdictional Commissioner during the financial year immediately preceding the tax year from which approval is sought.

Where approval is sought from tax year 2026–2027 or from the tax year of incorporation, sub-rule (2) permits application during that tax year. Do not apply that exception automatically to every later-year applicant.

Verification, annexure and the copy application

The person authorised to verify the applicant’s return under section 265 must verify Form No. 17. A research association claiming the Schedule III Table Sl. No. 23 exemption must also complete the annexure.

Send the copy application to Member (IT), CBDT with the acknowledgment showing that it was furnished as required. Keep both offices’ receipt records because different clocks refer to different receipts.

Respond to a deficiency within its stated clock

The Commissioner must serve a deficiency letter within one month from the end of the month of receipt in his office. The applicant has a maximum of one month from the end of the month in which that letter is served to remove the deficiency.

If it is not remedied, the Commissioner recommends invalidation to Member (IT). The Central Government may make the reasoned invalidation order; the recommendation and the final order are distinct steps.

Understand inquiry and decision periods

For a complete application, the Commissioner may inquire into genuineness and must send the recommendation within three months from the end of the quarter of receipt in his office. The Central Government can call for documents and further inquiry.

The notification or reasoned rejection is due within 12 months from the end of the quarter in which the application reaches the office of Member (IT), CBDT. Do not start that clock from a different office’s receipt without checking the rule.

Notification duration and fresh applications

A notification may cover the specified tax year or years, at any one time not exceeding five tax years. The applicant may seek a fresh notification at least three months before expiry.

Track the actual effective period in the issued notification. An application for a fresh notification is not an automatic extension of the existing one.

Withdrawal and the right to be heard

Approval may be withdrawn if the listed cessation, genuineness or Rule 33/34 condition failures are established. A reasonable opportunity of hearing is required before invalidation, rejection or withdrawal.

The relevant adverse order must be communicated to the applicant, Assessing Officer and jurisdictional Commissioner. Maintain the notice, response and decision as part of the approval file.

Key takeaways

Prior-year application

Use the general timing rule or the specific 2026–27/incorporation exception.

Different receipt clocks

Commissioner and Member (IT) receipts govern different deadlines.

Limited notification period

The specified effective period cannot exceed five tax years at a time.

Practical checklist

  • Record receipt and service dates by office.
  • Complete the annexure where the specified exemption is claimed.
  • Track conditions and the notification’s expiry.

Avoid

  • Do not equate a recommendation with the Government’s final order.
  • Do not assume renewal occurs automatically.

FAQs

Can every applicant apply during the first year for which it wants approval?

The same-year exception is stated for tax year 2026–2027 and the tax year of incorporation. The general rule requires the preceding financial year.

How long does the applicant have to cure a deficiency?

A maximum of one month from the end of the month in which the deficiency letter is served.

Can approval cover more than five tax years at one time?

No. Sub-rule (7) limits the notification to no more than five tax years at any one time.

Glossary

Deficiency letter
The notice identifying a defect or missing relevant document in the application.
Effective period
The tax year or years specified in the notification, within the rule’s five-year limit.

Official sources