DST to issue final decision on R&D tax break applications by Dec
The Department of Science and Technology (DST) has confirmed that it will, by December 15, indicate which of the 384 companies that have applied for tax deductions for research and development (R&D) activities under Section 11D of the Income Tax Act have been successful.
The tax scheme, which was introduced by the department to encourage and incentivise private-sector investment in R&D, allows companies a 100% deduction for R&D activities, as part of their deduction for business expenditure.
In October 2012, new administrative arrangements were introduced, which allowed firms access to an additional 50% deduction if an R&D project was preapproved by the Science and Technology Minister.
The DST said in a statement in late July that it had received an “unexpectedly large” number of applications since October, which had delayed the approval process, but added that the first batch of applications had now been approved.
The relevant companies would receive formal communication in this regard before the end of July.
“We hope this commitment provides clarity to companies that have applied or wish to apply for the additional 50% deduction. The overwhelming number of requests for preapproval is encouraging and shows that the private sector is more than willing to invest in R&D and intro- duce innovations in the country,” it said.
The department expected to have cleared the current backlog in approvals by March next year.
By that time, the DST expects to also be able to process and finalise new applications within 90 days.
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