Govt Notifies Tax Exemption to Scientific Research Association [Read Notification]

The Central Government, vide notification issued Income Tax Exemption under section 10(46) of the Income Tax Act, 1961 to Scientific Research Association.

However, the exemption is subject to the following conditions, firstly, the sole objective of the approved ‘Scientific Research Association’ ‘LERC’ shall be to undertake scientific research. Secondly, the approved organization shall carry out scientific research by itself. Thirdly, the approved organization shall maintain separate books of accounts for ‘LERC’ in respect of the sums received by it for scientific research, reflect therein the amounts used for carrying out research, get such books audited by an accountant as defined in the explanation to sub-section (2) of section 288 of the said Act and furnish the report of such audit duly signed and verified by such accountant to the Commissioner of Income-tax or the Director of Income-tax having jurisdiction over the case, by the due date of furnishing the return of income under sub-section (1) of section 139 of the said Act. Lastly, the approved organization shall maintain a separate statement of donations received and amounts applied for scientific research for ‘LERC’ and a copy of such statement duly certified by the auditor shall accompany the report of audit referred to above.

The Government can withdraw the exemption under the following circumstances,

(a) fails to maintain separate books of accounts referred to in sub-paragraph (iii) of paragraph 1; or (b) fails to furnish its audit report referred to in sub-paragraph (iii) of paragraph 1; or (c) fails to furnish its statement of the donations received and sums applied for scientific research referred to in sub-paragraph (iv) of paragraph 1; or (d) ceases to carry on its research activities or its research activities are not found to be genuine; or (e) ceases to conform to and comply with the provisions of clause (ii) of sub-section (1) of section 35 of the said Act read with rules 5C and 5D of the said Rules.

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