Issue/Justification
The Finance Act, 2015, with a view to phase out weighted deduction under Section 35(2AB) of the Act, restricted the allowability of expenditure incurred on scientific research (other than expenditure in the nature of cost of any land or building) on in-house research and development facility incurred on and from 1 April 2020 to 100 per cent from the existing 200 per cent.
Suggestion
With a view to achieve a growth rate of 8 per cent and put India on the growth trajectory and to ensure having a robust R&D database, it is suggested that the weighted deduction under Section 35(2AB) of the Act should be extended for a further period of 10 years. This would enable the country to be on par with the developed nations which have robust R&D centres fuelling growth in the economy.
