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What Is Corporate Tax (R&D Tax) ?
The Government of India has provided motivation in the forms of various tax incentives in order to increase investment in the Research and Development sector. Incentives are generally available in respect of revenue and capital expenditures, which are incurred by the entities in carrying our R&D activities related to their businesses.
Eligibility for claiming relief
1. The company claiming the relief should understand that the R & D project seeks to achieve an advance in overall knowledge or capability in the field of science and technology.
2. The project must be related to the company's related or existing business.
3. If a company is claiming tax relief under MSME scheme it must own any intellectual property that might arise from the project.
2. The project must be related to the company's related or existing business.
3. If a company is claiming tax relief under MSME scheme it must own any intellectual property that might arise from the project.
FAQ
Common List Of Questioner That Our Customer Ask From Us -Solved !
What are R&D cost that qualify relief?
Required If the company or project meets the necessary condition that it is eligible to claim tax relief on revenue expenditure i.e day to day business expenditures on assets such as-
1. Employees cost related to the employees directly involved in carrying out R&D excluding the consultants, agencies, workers or directors who have entered into a contract of employment.
2. Staff providers to whom the company is already paying and who are already engaged in the business of R&D.
3. Materials either consumable or transformable material which are used in carrying our R&D activity.
4. Clinical trial cost.
5. Computer software.
6. Subcontracted R&D expenditure.
1. Employees cost related to the employees directly involved in carrying out R&D excluding the consultants, agencies, workers or directors who have entered into a contract of employment.
2. Staff providers to whom the company is already paying and who are already engaged in the business of R&D.
3. Materials either consumable or transformable material which are used in carrying our R&D activity.
4. Clinical trial cost.
5. Computer software.
6. Subcontracted R&D expenditure.
When and how to claim R&D relief?
The company can claim R&D relief in your CT return or amended return. The time limit for the same is 2 years after the end of the relevant CT accounting period.
By two ways R&D tax relief can be claimed and they are as follows-
1. The company shall claim by placing an X in either box 99 (SME) or box 100 (large companies) of your CT return, and in both cases place the enhanced expenditure in box 101, i.e. the actual amount spent multiplied by 230% or 130% as appropriate. The company shall include this enhanced figure in your calculations of the profit (box 3) or loss (box 122) for the period.
2. If your company is a SME and you want to convert all Tax relief into a payable tax credits you will also need to put the amount payable to the company in box 87, box 89, and box 143, and put an X in the repayment due for this return period.
By two ways R&D tax relief can be claimed and they are as follows-
1. The company shall claim by placing an X in either box 99 (SME) or box 100 (large companies) of your CT return, and in both cases place the enhanced expenditure in box 101, i.e. the actual amount spent multiplied by 230% or 130% as appropriate. The company shall include this enhanced figure in your calculations of the profit (box 3) or loss (box 122) for the period.
2. If your company is a SME and you want to convert all Tax relief into a payable tax credits you will also need to put the amount payable to the company in box 87, box 89, and box 143, and put an X in the repayment due for this return period.
What are record keeping requirements ?
There are no specific records which keep records of R&D tax relief claims. But the general requirement of CT is to keep sufficient records to support the entries on your CT return still applies.
Key strengths of BIATConsultant?
1. We have a dedicated R&D team with extensive experience in providing this services to clients engaged in diverse industries and sectors.
2. Our team of professionals provides advice on R&D tax relief claims and regulatory implications and processing of potential R&D tax benefits.
2. Our team of professionals provides advice on R&D tax relief claims and regulatory implications and processing of potential R&D tax benefits.
What Are Key services provided by us ?
1. We assess liabilities to claim R&D incentives.
2. Assistance in preparation and processing application forms relevant for recognition and approval of R&D facilities.
3. Identify the expenditure eligible for R&D incentive claims.
4. Preparation, review and facilitating R&D tax incentive claims.
5. Also support services for realization of R&D incentive claims.
2. Assistance in preparation and processing application forms relevant for recognition and approval of R&D facilities.
3. Identify the expenditure eligible for R&D incentive claims.
4. Preparation, review and facilitating R&D tax incentive claims.
5. Also support services for realization of R&D incentive claims.
