TPDUP: Industrial R&D Promotion Programme (IRDPP)

Ministry of Science & Technology
Department of Scientific & Industrial Research

Industrial R&D Promotion Programme (IRDPP)

Introduction

Department of Scientific & Industrial Research (DSIR) is the nodal department for granting recognition to in-house R&D units in Industry, Scientific and Industrial Research Organizations (SIROs); and registration to Public funded research Institutions, universities, IIT’s, IISc, Regional Engineering College (RECs), other than hospitals.

Secretary, DSIR is the prescribed authority vide Gazette notification No.S.O.85 (E) dated 31st January, 2001 issued by Department of Revenue, Ministry of Finance for granting approval to commercial R&D companies Under Section 80IB (8A) of I.T. Act, 1961; also approval to in-house R&D Centres under Section 35(2AB) of I.T Act 1961 for Weighted Tax Deduction.

In-house R&D units recognized by DSIR in the area of pharmaceutical and bio-technology sector are eligible for duty free import of specified goods (comprising of analytical and specialty equipment as per list 28) for R&D as per notification No. 26/2003-customs dated 1st March, 2003 (item at Sl. No. 248(1); and duty free import of specified goods (comprising of analytical and specialty equipment as per list 28) for production as per notification No.26/2003-customs dated 1st March, 2003 (item at serial No.248(2); and duty free import of pharmaceutical reference standards as per notification No.26/2003-Customs dated 1st March, 2003 (item at serial No.138); and also the in-house R&D units engaged in the research and development in the area of chemical, drugs pharmaceuticals, (including clinical trials), bio-technology, electronic equipments, computers, telecommunication equipments, aircrafts and helicopters are eligible for weighted tax deduction of a sum of equal to one and one-half times of any expenditure incurred on scientific research (not being expenditure in the nature of cost of any land building) as approved by the prescribed authority i.e. Secretary, DSIR. In case of dispute, Secretary, DSIR is also prescribed authority in concurrence with Director General of Income-Tax (Exemption) for deciding cases of R&D expenditure made on Capital Equipment and related R&D activities under Section 35 of Income-Tax Act, 1961 referred by Central Board of Direct Taxes.

A few more incentives introduced by the Government to encourage R&D by industry include write off of revenue and capital expenditure on R&D, weighted tax deduction on sponsored research programmes of industry with National Laboratories/Universities /IITs; accelerated depreciation allowance on plant and machinery set up indigenous technology, custom duty exemption on goods imported for use in Government funded R&D projects, excise duty waiver for 3 years on goods produced based on indigenous technologies and duly patented in any two of the countries out of India, European Union(One Country), USA and Japan.

Scientific & Industrial Research Organizations in the area of Medical Agriculture, Natural and Applied Sciences and Social Sciences recognized by DSIR are eligible for notification under Section 35 (1) (ii)(iii) of I.T Act 1961 and also for availing Custom and Excise duty exemption.

Commercial R&D companies approved by DSIR before 1st April, 2004 are eligible for 10 years tax holidays.

Public Funded R&D Institutions registered by DSIR are eligible for availing custom duty exemption on import of equipment, spares and accessories and consumables as per notification No.51/96-Customs dated July, 23, 1996 and also for availing Central Excise Duty Waiver on purchase of indigenously manufactured items as per notification No. 10/97- Central Excise dated March 1, 1997 for scientific research purposes.

Objectives

The broad objectives are to:

Bring in-house R&D into sharper focus;
Strengthen R&D infrastructure in industry and SIROs;
Promote R&D initiatives of the industry and SIROs ;
Ensure that the contributions made by the in-house R&D centres and SIROs dovetail adequately in the overall context of technological & industrial development

Fiscal Incentives

Key Features of Union Budget 2012-2013 Relevant to Research and Development [08 JUN 12]

Key Features of Union Budget 2010-2011 Relevant to Research and Development [12 MAR 10]

Click Here for details of Fiscal Incentives

PROCEDURE AND REVISED GUIDELINES FOR APPROVAL OF IN-HOUSE R&D CENTRES AND REPORTING OF EXPENDITURE UNDER SECTION 35(2AB) OF IT ACT 1961 PDF RTF [16 JUN 10]

The revised guidelines contain specific guidelines for Seed Industries.

Updated Text of section 35(2AB) of IT Act.

The Eleventh Schedule of IT Act.

Annexure-IV and V of the earlier guidelines (May, 2009) have been restructured and combined in the revised guidelines and is appearing as Annexure- IV to facilitate submissions for report in Form 3CL.

Guidelines and Applications Forms

DSIR has created a new portal for submission of applications for recognition and registration of in-house R&D units (RDI), Scientific and Industrial Research Organisations (SIRO) and Public Funded Research Institutions (PFRI) w.e.f. 05.11.2012. Organisations intending to apply to DSIR for recognitions and registrations are requested to click on the link provided below to access the new portal, wherein they can submit their applications online. On submission of the application online, they should take printout and get it signed by MD or any whole-time Director of the company and submit one set of hard copy along with all the annexures, attachments etc. to DSIR by Speed-post.