Income-tax Form No. 12: Report by Prescribed Authority to CCCT

Form 12, prescribed under Rule 29 of the Income-tax Rules, 2026, is a statutory report submitted by the prescribed authority, typically the Secretary of the Department of Scientific and Industrial Research (DSIR), to the jurisdictional Chief Commissioner of Income-tax regarding approved in-house R&D facilities under section 45(2) of the Income-tax Act, 2025. It serves as a post-approval compliance and reporting mechanism, certifying the nature, adequacy, and recognition status of the facility, along with quantifying eligible capital and revenue expenditure. The form is not filed by the company but forms a crucial part of the verification process for deduction claims. While it provides a technical basis for assessing eligible expenditure, it does not automatically determine deduction allowability, which remains subject to tax authority verification. Any discrepancies may trigger further scrutiny and impact claims. Overall, Form 12 enhances transparency, accountability, and systematic monitoring of R&D tax incentives.

FAQs Pertaining to Income Tax Form 12: Report to be submitted by prescribed authority to the Chief Commissioner of Income-tax having  jurisdiction over the company

Form of Statutory Report under Section 45(2) read with RULE 29 of the Income-tax Rules, 2026

Q 1. What is FORM 12?

Ans. FORM 12 is a statutory report furnished by the prescribed authority to the Chief Commissioner of Income-tax having jurisdiction over the company, in respect of an approved in-house research and development (R&D) facility under section 45(2) of the Income-tax Act, 2025, read with RULE 29 of the Income-tax Rules.

Q 2. What is the purpose of FORM 12?

Ans. The purpose of FORM 12 is to:

• report the examination and evaluation of the in-house R&D facility;
• certify the nature, adequacy and recognition status of the facility;
• quantify and report eligible expenditure incurred on the approved facility;
• enable jurisdictional tax authorities to verify and monitor deductions claimed by the company under section 45(2).

Q 3. Who is required to furnish FORM 12?

Ans. FORM 12 is required to be furnished by the prescribed authority, namely the Secretary, Department of Scientific and Industrial Research (DSIR), or such authority as notified under RULE 29.

Q 4. To whom is FORM 12 furnished?

Ans. FORM 12 is furnished to the Chief Commissioner of Income-tax having jurisdiction over the company. A copy is also provided to the company for its records.

Q 5. Is FORM 12 required to be filed by the company?

Ans. No. FORM 12 is not required to be filed by the company. It is an institutional report furnished by the prescribed authority as part of the statutory oversight mechanism.

Q 6.What information is contained in FORM 12?

Ans. FORM 12 contains, inter alia:

• particulars of the company and its principal officer;
• nature of business and its linkage with research objectives;
• details and adequacy of in-house R&D facilities;
• DSIR recognition details;
• confirmation of agreement entered under Form 11;
• details of eligible capital and revenue expenditure;
• information relating to disposal of assets, if any.

Q 7. What is the relevance of expenditure details reported in FORM 12?

Ans. The expenditure details reported in FORM 12 provide the basis for verifying the amount of expenditure eligible for deduction under section 45(2), subject to statutory conditions.

Q 8. Does FORM 12 determine the final allowability of deduction?

Ans. No. FORM 12 is a reporting and certification instrument. Final allowability of deduction is subject to verification by the Income-tax Department during processing or assessment.

Q 9. Is FORM 12 furnished annually?

Ans. Yes. FORM 12 is required to be furnished periodically in respect of each approved in-house R&D facility, covering expenditure incurred during the relevant tax year, as prescribed under RULE 29.

Q 10. What happens if discrepancies are noticed in FORM 12?

Ans. Discrepancies or adverse findings reported in FORM 12 may lead to further verification by the Income-tax Department and may impact the deduction claimed under section 45(2).

Q 11. How does FORM 12 fit into the overall compliance framework?

Ans. FORM 12 completes the reporting and quantification stage of the in-house R&D incentive regime, linking FORM 14 approval with deduction claims under section 45(2).

Guidance Note Pertaining to Income Tax Form 12: Report to be submitted by prescribed authority to the Chief Commissioner of Income-tax having  jurisdiction over the company

Proposed FORM 12 is a statutory reporting form through which the prescribed authority submits its findings and certification in respect of an approved in-house research and development (R&D) facility to the Chief Commissioner of Income-tax having jurisdiction over the company. The form plays a central role in the administration of deductions under section 45(2) of the Income-tax Act, 2025.

Q 2. Legislative Framework

Ans. Section 45(2) of the Income-tax Act, 2025 provides for deduction in respect of expenditure incurred on approved in-house R&D facilities. RULE 29 of the Income-tax Rules prescribes the approval, agreement, audit and reporting framework. FORM 12 operationalised the reporting and quantification obligations of the prescribed authority under this framework.

Q 3. Role of FORM 12 in the Compliance Lifecycle

Ans. FORM 12 represents the post-approval reporting stage in the in-house R&D compliance lifecycle:

1. Application and agreement by the company in FORM 11;

2. Approval of in-house R&D facility by DSIR in FORM 14;

3. Examination and certification by the prescribed authority;

4. Reporting of findings and eligible expenditure through FORM 12;

5. Verification of deduction claims by the Income-tax Department

Q4. Authority Responsible for Furnishing FORM 12

Ans. FORM 12 is furnished by the Secretary, Department of Scientific and Industrial Research, acting as the prescribed authority under RULE 29. The obligation is institutional and independent of the company.

Q. 5. Contents of FORM 12

Ans. FORM 12 is divided into two principal parts:

Part A – Evaluation of In-house R&D Facility

This part covers:

• nature of business and alignment with research objectives;
• proposed scientific research objectives;
• details and adequacy of existing in-house R&D facilities;
• DSIR recognition details;
• confirmation of agreement entered under FORM 11;
• production details of eligible products.

Part B – Expenditure and Asset Details

This part reports:

• location-wise details of R&D facilities;
• eligible capital and revenue expenditure incurred;
• total expenditure qualifying under the approved facility;
• details of disposal or transfer of assets, if any

Q 6. Significance of Expenditure Certification

Ans. The expenditure figures reported in FORM 12 provide an objective and technical basis for tax authorities to examine deduction claims under section 45(2). However, the form does not itself confer entitlement to deduction.

Q 7. Time Limit and Mode of Furnishing

Ans. FORM 12 is required to be furnished within the time limits prescribed under RULE 29 and is envisaged to be submitted electronically to enable system-driven processing and monitoring.

Q 8. Impact on Deduction Claims

Ans. While FORM 12 is a critical input for verification, the allowability of deduction under section 45(2) remains subject to compliance with the Act, Rules and assessment by the Income-tax Department.

Q 9. System-driven Oversight under the Income-tax Act, 2025

Ans. Proposed FORM 12 is designed to integrate with electronic compliance systems, enabling standardised reporting, cross-linkage with FORM 11 and audit reports, and improved oversight of in-house R&D incentives.

Q 10. Conclusion

Ans. FORM 12 is a cornerstone of the in-house research and development incentive regime under the Income-tax Act, 2025. By providing an authoritative technical report from DSIR to the tax administration, it ensures transparency, accountability and effective administration of deductions under section 45(2).