📢 Income Tax Due Date Alert – Section 35(2AB) Audit Submission (FY 2024–25)


Innovation and research play a crucial role in shaping the future of businesses and the nation’s economy. To encourage investment in research and development (R&D), the Indian government provides tax incentives under Section 35(2AB) of the Income Tax Act, 1961. However, to claim these benefits, compliance with certain reporting and audit requirements is essential — one of which is the timely submission of the audit report to the Department of Scientific and Industrial Research (DSIR).

Let’s take a closer look at what Section 35(2AB) entails, who it applies to, and the upcoming due date for FY 2024–25.

🔍 What is Section 35(2AB)?

Section 35(2AB) of the Income Tax Act offers a weighted tax deduction to companies that invest in in-house research and development facilities. This incentive is designed to promote scientific innovation and technological advancement within India.

Under this provision, a company engaged in manufacturing or production (excluding certain specified industries) can claim a weighted deduction on expenditure incurred on approved R&D activities.
The approval must be obtained from the Department of Scientific and Industrial Research (DSIR) under the Ministry of Science and Technology.

🧾 Who Can Avail This Benefit?

The deduction under Section 35(2AB) is available to:

  • Indian companies involved in manufacturing or production of goods (excluding beverages, tobacco, etc.).

  • Companies with an in-house R&D facility approved by DSIR.

  • Companies that maintain separate books of account for R&D activities.

The deduction is applicable only for revenue and capital expenditure (excluding land and building) incurred on in-house research facilities.

📅 Important Due Date – 31st October 2025

For FY 2024–25 (AY 2025–26), companies claiming deduction under Section 35(2AB) must submit the audit report of their R&D accounts to the Secretary, DSIR by 31st October 2025.

Timely submission ensures that:

  • The company remains eligible for the weighted deduction.

  • The DSIR can verify and approve the R&D expenses.

  • The Income Tax Department recognizes the deduction during assessment.

🧮 Why Timely Submission Matters

Failure to submit the audit report within the due date can lead to:

  • Disallowance of the weighted deduction, resulting in higher tax liability.

  • Non-compliance notices from the authorities.

  • Loss of credibility for future DSIR approvals.

Hence, it’s critical for companies to maintain accurate R&D expenditure records and file the audit report before the deadline.

🧠 Documents Required for Section 35(2AB) Compliance

To ensure a smooth audit and submission process, companies should keep the following documents ready:

  1. Approval letter from DSIR recognizing the in-house R&D facility.

  2. Audit report of accounts relating to R&D activities.

  3. Details of capital and revenue expenditure incurred.

  4. Separate R&D account books for the financial year.

  5. Copy of the company’s Income Tax Return (once filed).

⚙️ Steps to File the Audit Report

  1. Prepare the audit report for R&D activities as per DSIR requirements.

  2. Get the report certified by a qualified Chartered Accountant.

  3. Submit the copy of the audit report to the Secretary, DSIR, before 31st October 2025.

  4. Ensure acknowledgment and maintain a record for future assessments.

💡 Expert Tip

Many companies overlook the DSIR submission after claiming the deduction in their tax returns — leading to disallowance later. It’s best to coordinate between your R&D team, accounts department, and tax consultant well before the due date.

At Taxla Services P. Ltd, our team of tax professionals ensures that your company stays compliant with all R&D-related tax regulations and that your audit reports are filed accurately and on time.

📞 Need Professional Help?

Ensure seamless compliance with Section 35(2AB) and other tax deadlines.
Let our experts handle your tax filings, audits, and documentation with precision and care.

📞 Contact us today: +91 7305701454
📧 Email: auditsiva2@gmail.com
🌐 Website: www.taxlaservices.com

#IncomeTaxUpdate #Section35_2AB #R&DTaxDeduction #TaxFilingInChennai #IncomeTaxIndia #TaxCompliance #DSIR #ResearchAndDevelopment #TaxlaServices #BestAuditorInTamilnadu



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