Income-tax Form No. 11: Application for Agreement for In-house R&D Facility with DSIR

Form 11 under the Income-tax Act, 2025 is an application prescribed under Rule 29 for companies seeking approval of in-house research and development (R&D) facilities and entering into an agreement with the Department of Scientific and Industrial Research (DSIR). It applies to companies engaged in biotechnology or manufacturing eligible articles and is a prerequisite for claiming deductions under Section 45(2), subject to compliance and verification. The form captures company details, R&D expenditure, facility information, and proposed research objectives, along with undertakings for maintenance of audited accounts and compliance. DSIR evaluates the application, enters into an agreement, and reports to tax authorities. Approval is facility-specific and does not guarantee deduction, which depends on fulfilment of statutory conditions. Post-approval, companies must maintain audited accounts, submit annual reports, and comply with agreement terms, failing which approval may be withdrawn and deductions denied.

Income Tax Department
Ministry of Finance, Government of India

FAQ’s pertaining to Income Tax Form 11: Application for entering into an agreement with the Department of Scientific and Industrial research for cooperation in In-house research development facility

FORM 11 – Frequently Asked Questions (FAQs)

Form of Application under Section 45(2) read with Rule 29 of the Income-tax Rules, 2026

Q1. What is FORM 11 ?

Ans: FORM 11 is an application form prescribed under Rule 29 of the Income-tax Rules for entering into an agreement with the Department of Scientific and Industrial Research (DSIR) for cooperation in respect of an in-house research and development (R&D) facility and for audit of accounts maintained by such facility, for the purposes of section 45(2) of the Income-tax Act, 2025.

Q2. What is the purpose of FORM 11?

Ans: The purpose of FORM 11 is to:

• enable a company to seek approval of its in-house R&D facility;
• formalise cooperation between the company and DSIR through an agreement;
• ensure proper maintenance and audit of R&D accounts; and
• establish eligibility for claiming deduction in respect of in-house R&D expenditure under section 45(2), subject to statutory conditions.

Q3. Who is required to file FORM 11?

AnsFORM 11 is required to be filed by a company engaged in biotechnology or manufacture or production of an eligible article or thing (not specified in the Thirteenth Schedule) that maintains or proposes to maintain an in-house R&D facility and seeks approval under section 45(2).

Q4. With whom is the agreement under FORM 11 entered into?

Ans The agreement is entered into between the applicant company and the Department of Scientific and Industrial Research (DSIR), Government of India.

Q5. Is FORM 11 a one-time form or required to be filed annually?

Ans FORM 11 is generally a one-time application for approval of an in-house R&D facility. However, annual compliance and reporting obligations continue as prescribed under the Act, Rules and the terms of the agreement. The annual progress report and annual expenditure details are required to be filed in Annexure A and B of FORM 11 annually.

Q6. What information is required to be furnished in FORM 11? FORM 11 requires disclosure of:

• particulars of the company and its business;
• details of production and R&D expenditure for the past three tax years;
• details of existing in-house R&D facilities and DSIR recognition;
• proposed objectives of scientific research;
• undertakings relating to maintenance of accounts, audit and compliance;
• annexures detailing facility-wise expenditure and progress.

Q7. What is the role of DSIR in FORM 11?

Ans DSIR evaluates the feasibility and genuineness of the in-house R&D facility, enters into an agreement with the company, and submits its reports to the jurisdictional Chief Commissioner of Income-tax within the prescribed time.

Q8. Does filing FORM 11 guarantee deduction under section 45(2)?

AnsNo. Filing and approval of FORM 11 is a pre-condition. Actual allowance of deduction depends on compliance with section 45(2), fulfilment of conditions in the agreement, and verification by the Income-tax Department.

Q10. What are the key post-approval obligations of the company? The company is required to:

• maintain separate audited accounts for R&D expenditure;
• submit annual progress reports to DSIR;
• attach audited R&D accounts with the return of income;
• ensure assets of the facility are used only for approved purposes;
• furnish annual information in Annexure I and Annexure II.

Q11 .What happens if conditions of the agreement are violated?

Ans Non-compliance with conditions of section 45(2), Rule 29 or the agreement may result in withdrawal of approval and denial of deduction.

Q12. How does FORM 11 differ from Forms FORM 7 –10?

Ans FORM 11 relates specifically to in-house R&D facilities of companies under section 45(2), whereas Forms FORM 7 –10 relate to sponsored scientific research programmes under section 45(3)(c).

Guidance Note pertaining to Income Tax Form 11: Application for entering into an agreement with the Department of Scientific and Industrial research for cooperation in In-house research development facility

Proposed FORM 11 is the statutory application and agreement framework governing approval of in-house research and development (R&D) facilities maintained by companies under section 45(2) of the Income-tax Act, 2025. The form facilitates cooperation between the company and the Department of Scientific and Industrial Research (DSIR) and establishes the compliance architecture for in-house R&D incentives.

Q2. Legislative Framework

Ans Section 45(2) of the Income-tax Act, 2025 provides for deduction in respect of expenditure incurred by a company on an approved in-house research and development facility. Rule 29 of the Income-tax Rules prescribes the procedure, conditions and forms for approval, audit and reporting. FORM 11 operationalises the agreement and approval stage for in-house R&D facilities.

Q3. Scope and Applicability

Ans FORM 11 applies to companies:

• engaged in biotechnology, or
• engaged in manufacture or production of eligible articles or things (other than those specified in the Thirteenth Schedule), which maintain or propose to maintain an in-house R&D facility and seek approval under section 45(2).

Q4. Structure of FORM 11

Ans FORM 11 comprises the following components:

Part A – Particulars of the Company

Captures details of:

• corporate identity and jurisdiction;
• nature of business and products;
• production and R&D expenditure history;
• existing in-house R&D facilities and DSIR recognition;
• proposed scientific research objectives.

Part B – Agreement with DSIR

Sets out the terms of cooperation between the company and DSIR, including:

• maintenance of approved in-house R&D facility;
• audit and reporting obligations;
• cooperation in research activities;
• submission of DSIR reports to tax authorities.

Part C – Declaration and Undertaking

Contains binding undertakings by the company relating to:

• maintenance and audit of accounts;
• furnishing of audited statements with the return of income;
• submission of progress reports and annexures;
• restrictions on disposal of assets;
• compliance with statutory and agreement conditions.

Annexure I and Annexure II provide for detailed facility-wise and expenditure-wise information to be submitted annually.

Q5. Role of DSIR

Ans DSIR functions as the prescribed authority for evaluation and oversight of in-house R&D facilities. Upon satisfaction regarding feasibility and genuineness of expenditure, DSIR submits its reports to the jurisdictional Chief Commissioner of Income-tax within the prescribed time.

Q6. Nature and Effect of Approval

Approval under FORM 11 :

• is facility-specific;
• is subject to continued compliance with section 45(2) and Rule 29;
• does not automatically result in allowance of deduction.

Deduction is allowable only upon verification of compliance at the time of processing or assessment.

Q7. Post-Approval Compliance Obligations

Ans Following approval, the company must:

• maintain separate audited accounts for capital and revenue R&D expenditure;
• submit annual progress and expenditure reports;
• attach audited R&D accounts with the return of income;
• ensure assets are used exclusively for approved purposes;
• furnish requisite information in Annexure I and Annexure II annually.

Q8. Distinction from Sponsored Research Forms

Ans FORM 11 operates in a distinct regime relating to in-house R&D facilities under section 45(2), whereas Forms 7 to 10 apply to sponsored scientific research programmes under section 45(3)(c).

Q8.Conclusion

Ans FORM 11 is a foundational instrument in the in-house R&D incentive framework under the Income-tax Act, 2025. Companies seeking benefit under section 45(2) must ensure accurate filing, strict adherence to agreement terms and continuous compliance to safeguard eligibility for deduction.