Conditions for exemption under section 35 of income tax

Income tax department put some conditions for having the exemptions under section 35 of income tax act. Section 35 gives some relief to University, Colleges and other institute on research. Income tax department put some conditions on it which is applicable from assessment year 2011-12 and onwards, Income tax department has issued a notification no. 41 dated 28 September 2012 about the conditions on section 35 of income tax act. Full notification is as under.


NOTIFICATION NO. 41/2012 [F.NO. 203/38/2011/ITA-II], DATED 28-9-2012
It is hereby notified for general information that the organization National Law School of India University, Bangalore has been approved by the Central Government for the purpose of clause (iii) of sub-section (1) of section 35 of the Income-tax Act, 1961 (said Act), read with Rules 5C and 5E of the Income-tax Rules, 1962 (said Rules), from Assessment year 2011-12 onwards in the category of "University, College or Other Institution", engaged in research in social science research subject to the following conditions, namely:-

 (i)  the sums paid to the approved organization shall be utilized for research in social sciences;

(ii)  The approved organization shall carry out research in social science through its faculty members or its enrolled students;

(iii)  The approved organization shall maintain separate books of account in respect of the sums received by it for social sciences research, reflect therein the amounts used for carrying out research, get such books audited by an accountant as defined in the Explanation to sub-section (2) of section 288 of the said Act and furnish the report of such audit duly signed and verified by such accountant to the Commissioner of Income-tax or the Director of Income-tax having jurisdiction over the case, by the due date of furnishing the return of income under sub-section (1) of section 139 of the said Act;

(iv)  The approved organization shall maintain a separate statement of donations received and amounts applied for research in social science and a copy of such statement duly certified by the auditor shall accompany the report of audit referred to above.

2. The Central Government shall withdraw the approval if the approved organization:-

(a)  fails to maintain separate books of account referred to in sub-paragraph (iii) of paragraph 1; or
(b)  fails to furnish its audit report referred to in sub-paragraph (iii) of paragraph 1; or
(c)  fails to furnish its statement of the donations received and sums applied for research in social science or statistical research referred to in sub-paragraph (iv) of paragraph 1; or
(d)  ceases to carry on its research activities or its research activities are not found to be genuine; or
(e)  ceases to conform to and comply with the provisions of clause (iii) of sub-section (1) of section 35 of the said Act read with rules 5C and 5E of the said Rules.
Tags-section 35 of income tax act,section 35 exemptions,income tax section 35,conditions to section 35 income tax,income tax section 35 conditions
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