Income-tax Form No. 13: Accountant’s Report for In-house Scientific Research Facility

The document explains FORM 13 under Section 45(2) of the Income-tax Act, 2025 read with Rule 29, which serves as a mandatory audit report for companies claiming deduction on approved in-house research and development (R&D) facilities. The form must be furnished annually by the company through a qualified accountant and submitted along with the return of income. It certifies maintenance of separate accounts, correctness of expenditure, and compliance with guidelines issued by the Department of Scientific and Industrial Research (DSIR). FORM 13 requires reporting of approval details, auditor’s opinion on accounts, and audited break-up of capital and revenue expenditure. While mandatory, the report does not guarantee deduction, which remains subject to verification by the tax authorities. It operates within a broader compliance framework alongside approval and reporting forms, ensuring audit-based validation. The framework strengthens transparency, accountability, and accuracy in claiming R&D tax incentives.

FAQ’s pertaining to Income Tax Form 13: Report from an accountant to be furnished under Section 45(2) relating to in-house scientific research and development facility

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

 Q1. What is FORM 13?

Ans FORM 13 is an audit report furnished by an accountant in respect of an approved in- house scientific 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. It certifies the maintenance of accounts and the correctness of expenditure incurred on the approved facility.

Q2. What is the purpose of FORM 13?

Ans The purpose of FORM 13 is to:

• certify that separate accounts for the approved in-house R&D facility have been maintained;
• report whether such accounts have been satisfactorily maintained;
• certify whether the expenditure incurred is in consonance with guidelines issued by the Department of Scientific and Industrial Research (DSIR);
• provide audited details of capital and revenue expenditure incurred on the facility.

FORM 13 is required to be furnished by the company claiming deduction under section 45(2), through an accountant as defined in section 515(3)(b) of the Income- tax Act, 2025.

Q3. Who is an ‘accountant’ for the purposes of FORM 13?

Ans An ‘accountant’ means an accountant as defined in section 515(3)(b) of the Income- tax Act, 2025, including a chartered accountant holding a valid certificate of practice.

Q4. To whom is FORM 13 furnished?

FORM 13 is required to be furnished to the Income-tax Department and is to be attached with or furnished in support of the return of income filed by the company for the relevant tax year.

Q5. What information is required to be reported in FORM 13?

Ans FORM 13 requires reporting of:

• details of approval of the in-house R&D facility;
• confirmation of maintenance of separate accounts;
• auditor’s opinion on adequacy and correctness of accounts;
• certification of compliance with DSIR guidelines;
• audited break-up of capital and revenue expenditure incurred on the facility.

Q6. Is FORM 13 required to be furnished every year?

Ans Yes. FORM 13 is required to be furnished annually for each tax year in which deduction under section 45(2) is claimed.

Q7. Does furnishing FORM 13 guarantee allowance of deduction?

Ans No. Furnishing of FORM 13 is a mandatory compliance requirement but does not, by itself, guarantee allowance of deduction. Deduction is subject to verification and assessment by the Income-tax Department.

Adverse remarks regarding maintenance of accounts or non-consonance with DSIR guidelines may lead to further scrutiny and may result in denial or restriction of deduction under section 45(2).

Q8. How does FORM 13 differ from Form 3CL?

Ans Form 3CL is a report furnished by the prescribed authority (DSIR) to the tax authorities, whereas FORM 13 is an audit report furnished by an independent accountant certifying the expenditure incurred by the company.

Q9. How does FORM 13 fit into the overall compliance framework?

Ans FORM 13 completes the audit and certification layer of the in-house R&D incentive regime, complementing approval under FORM 14 and reporting under FORM 12 for deduction under section 45(2).

Guidance Note pertaining to Income Tax Form 13: Report from an accountant to be furnished under Section 45(2) relating to in-house scientific research and development facility

Proposed FORM 13 is a statutory audit report required to be furnished in respect of an approved in-house scientific research and development (RCD) facility under section 45(2) of the Income-tax Act, 2025. The form provides independent assurance regarding maintenance of accounts and correctness of expenditure incurred on the approved facility.

2. Legislative Framework

Section 45(2) of the Income-tax Act, 2025 provides for deduction in respect of expenditure incurred on approved in-house RCD facilities. RULE 29 of the Income-tax Rules prescribes the conditions for approval, audit and reporting. FORM 13 operationalises the audit and certification requirement under this framework.

3. Role of FORM 13 in the Compliance Lifecycle

FORM 13 represents the audit and certification stage in the in-house RCD compliance lifecycle:

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

2. Approval and oversight by DSIR in FORM 14;

3. Independent audit and certification through FORM 13;

4. Reporting by prescribed authority through FORM 12;

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

4. Person Responsible for Furnishing FORM 13

FORM 13 is required to be furnished by the company through an independent accountant, as defined in section 515(3)(b) of the Income-tax Act, 2025. The accountant is responsible for auditing the accounts of the approved RCD facility and certifying the report.

5. Scope of Audit under FORM 13

The audit under FORM 13 covers:

• verification of maintenance of separate accounts for the approved facility;
• examination of capital and revenue expenditure incurred;
• assessment of conformity of expenditure with DSIR guidelines;
• linkage of reported expenditure with audited financial statements.

6. Contents of FORM 13

FORM 13 requires the accountant to certify:

• approval details of the RCD facility;
• whether separate accounts are maintained;
• whether accounts are satisfactorily maintained;
• whether expenditure is in consonance with DSIR guidelines;
• audited break-up of capital and revenue expenditure;
• cross-reference of expenditure with audited financial statements.

7. Time and Mode of Furnishing

FORM 13 is required to be furnished annually for each tax year in which deduction under section 45(2) is claimed. It is envisaged to be furnished electronically with digital authentication.

8. Significance for Deduction Claims

FORM 13 is a mandatory supporting document for claiming deduction under section 45(2). However, it does not by itself confer entitlement to deduction. Allowability remains subject to verification by the Income-tax Department.

9. Interaction with Other Forms

FORM 13 operates in conjunction with:

• FORM 11 (application and agreement);
• FORM 14 (approval of in-house RCD facility);
• FORM 12 (report of prescribed authority).

Together, these forms establish approval, oversight and audit layers for in-house RCD incentives.

10. System-driven Compliance under the Income-tax Act, 2025

Proposed FORM 13 is designed to integrate with electronic filing and verification systems, enabling cross-validation of audit data with approval and reporting forms and strengthening compliance oversight.

11. Conclusion

FORM 13 is a critical assurance mechanism in the in-house research and development incentive regime under section 45(2) of the Income-tax Act, 2025. Accurate and timely furnishing of the audit report is essential to support legitimate deduction claims and to ensure integrity of the incentive framework.