Educational institutions seeking to undertake or sponsor scientific research programmes must navigate the approval framework established under Rule 30 of the Income-tax Rules, 2026. This provision, read with Section 45(3)(c) of the Income-tax Act, 2025, provides a structured mechanism for obtaining approval for scientific research programmes, enabling sponsors to claim deductions for contributions made towards such research.
The Statutory Framework
Section 45(3)(c) of the Income-tax Act, 2025 provides for a deduction in respect of any sum paid to a national laboratory, a University, an Indian Institute of Technology, or a specified person, with a specific direction that the said sum shall be used for scientific research undertaken under a programme approved in this behalf by the prescribed authority. Rule 30 of the Income-tax Rules, 2026 prescribes the authorities, procedures and conditions governing approval, reporting and oversight.
Section 135 of the Act further provides for deduction in respect of certain donations for scientific research or rural development, allowing deduction for sums paid to research associations, Universities, colleges or other institutions approved for the purposes of section 45(3)(a)(i).
Prescribed Authorities Under Rule 30
Rule 30(1) specifies the prescribed authorities for different categories of research programmes. For clauses (i) to (iii) of section 45(3)(c), the prescribed authority is the head of the concerned National Laboratory, University, or Indian Institute of Technology. For clause (iv), the prescribed authority is the Principal Scientific Adviser to the Government of India.
National Laboratory
A National Laboratory is a scientific laboratory functioning at the national level under the aegis of the Indian Council of Agricultural Research, the Indian Council of Medical Research, the Council of Scientific and Industrial Research, the Defence Research and Development Organisation, the Department of Electronics, the Department of Bio-Technology or the Department of Atomic Energy, and which is approved as a National Laboratory by such authority and in such manner, as may be prescribed.
University
A University means a University established or incorporated by or under a Central, State or Provincial Act and includes an institution declared under section 3 of the University Grants Commission Act, 1956, to be a University for the purposes of that Act.
Indian Institute of Technology
Indian Institute of Technology shall have the same meaning as that of "Institute" defined in section 3(g) of the Institutes of Technology Act, 1961.
Specified Person
Specified person means such person approved by the prescribed authority, which under Rule 30(2) is the Principal Scientific Adviser to the Government of India for clause (iv) of section 45(3)(c).
Application Procedure
Form 7 Application
The application for obtaining approval of a scientific research programme under section 45(3)(c) shall be made by a sponsor in Form No. 7. Form 7 is a mandatory application for sponsors seeking prior approval of a scientific research programme under section 45(3)(c). It establishes a pre-approval mechanism that requires the sponsor to provide comprehensive details of the proposed research programme.
The application must include details of the sponsor, the research institution where the programme will be conducted, the objectives and scope of the research, the expected duration, the budget and funding sources, and the expected outcomes and deliverables.
Approval Process
Rule 30(4) provides that the prescribed authority shall, if he is satisfied that it is feasible to carry out the scientific research programme, 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. The approval is effective for such period not exceeding five tax years.
For the Principal Scientific Adviser, Rule 30(5) provides that he 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.
Rejection of Application
Rule 30(6) provides that a reasonable opportunity of being heard shall be granted to the sponsor before rejecting an application. 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 to the research association or university or college or other institution.
Conditions for Approval
Rule 30(7) specifies the conditions subject to which approval of a scientific research programme is granted. 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.
The National Laboratory, University, Indian Institute of Technology or specified person shall maintain a separate account for each approved programme. 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 for furnishing the return of income.
Reporting Requirements
The following information, statement or report shall be submitted to the Chief Commissioner of Income-tax having jurisdiction over the sponsor:
Progress Report: 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.
Completion Certificate: 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.
Audited Accounts: 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.
Asset Disposal Restrictions
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.
Programme Duration
Rule 30(8) provides that the prescribed authority shall not extend the duration of the programme or approve any escalation in costs. The sponsor may, at least three months before the expiry of the effective period of the order, make an application to the prescribed authority for passing a fresh order.
Receipt of Payment
Form 9 is a prescribed receipt issued for payments received towards an approved scientific research programme under section 45(3)(c). 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.
Deduction for Donations
Section 135(1)(a) provides for deduction in respect of sums paid to a research association which has as its object the undertaking of scientific research, or a University, college or other institution approved for the purposes of section 45(3)(a)(i) to be used for scientific research. Section 135(1)(b) provides for deduction for sums paid to a research association which has as its object the undertaking of research in social science or statistical research.
Deduction for contributions made as per section 135(1) shall not be allowed if the gross total income of the assessee includes income which is chargeable under the head "Profits and gains of business or profession", or if the contribution is made in cash exceeding ₹2,000. The claim of the assessee for a deduction shall be allowed on the basis of information relating to such sum furnished by the payee to the prescribed income-tax authority, subject to verification as per the risk management strategy formulated by the Board.
Best Practices for Educational Institutions
Educational institutions seeking approval for scientific research programmes should ensure that the application in Form No. 7 is complete in all respects and accompanied by all required documents. The institution should maintain separate accounts for each approved programme and ensure that the accounts are audited annually.
The institution should submit the required progress reports, completion certificates, and audited accounts within the prescribed time limits. The institution should not dispose of any assets acquired for the approved programme without the approval of the Chief Commissioner of Income-tax having jurisdiction over the sponsor.
Regular review of compliance with the conditions of approval should be conducted, and any issues should be addressed promptly. The institution should also maintain proper documentation to support the research activities and expenditure incurred.
Disclaimer: This article provides general information and does not constitute legal advice. For specific guidance on scientific research approval under Rule 30, please consult qualified legal and tax professionals.
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