Tax BenefitMinistry of Science and TechnologyVerified 19 May 2026

R&D Tax Deduction — Section 35

Section 35 of the Income Tax Act provides tax deductions for R&D expenses, promoting innovation by reducing taxable income for those conducting research in-house or through approved institutions. Deductions cover various R&D expenditures with specific conditions to claim benefits.

Maximum amount
—
Processing time
16–52 weeks
Application window
Open year-round

Check if your startup qualifies for R&D Tax Deduction — Section 35

Answer a few questions about your company and get a free, personalised eligibility report across all active government schemes — including Section 35.

Check eligibility — free

Eligibility criteria

Company type
Private Limited, LLP
Stage
Pre-Revenue, Early Stage (Revenue < ₹1Cr), Growth Stage (₹1Cr–₹25Cr), Scaling (₹25Cr+)
States
All India (nationwide)
Sectors
saas, ai, fintech, healthtech, pharma, biotech, chemicals, engineering, manufacturing

Documents required

1
Form 3CK
The official statutory application form under Income Tax Rules for seeking approval of an in-house R&D facility.
Tip: Ensure all sections are filled accurately with detailed project data before submission.
2
DSIR Recognition Letter
Valid certificate proving that the applicant's in-house R&D center is already recognized by the DSIR. Mandatory for claiming deductions.
Tip: Apply separately for DSIR recognition if not already obtained.
3
Audited Separate Books of Accounts
Dedicated, exclusive financial ledgers strictly maintaining revenue and capital R&D accounts. Essential to differentiate R&D expenses from regular business costs.
Tip: Maintain clear and separate financial records from other business activities.
4
Statutory Auditor’s Certificate (Form 3CLA)
An official report signed by a Chartered Accountant verifying the exact R&D expenditures.
Tip: Engage a Chartered Accountant to properly audit and certify R&D expenses.
5
Detailed Project Reports (DPR)
Thorough documentation of scientific objectives, milestones, timelines, and technical outcomes of each R&D program.
Tip: Include clear details and evidence of R&D processes and outcomes.
6
Layout Plan of the R&D Center
Blueprints proving that the R&D facility is situated in a physically separate, earmarked area/building segregated from routine manufacturing lines.
Tip: Ensure the layout plans are up-to-date and properly labeled.
7
Capital Equipment Breakdown
Comprehensive itemized list and proof of investment if capital equipment purchases for R&D exceed ₹1 Crore.
Tip: Prepare a detailed list if applicable, document values carefully.
8
Seed Company Profile
Specialized documentation detailing field trial approvals and genetic data for companies in the agricultural/seed industry.
Tip: Ensure all data is up-to-date and approved if applicable to your business.
9
Statutory Operating Licenses
Valid environment, safety, or manufacturing permits required to run specific testing equipment or laboratory facilities.
Tip: Maintain validity and compliance of all operational licenses.

How to apply for Section 35

1
Register your enterprise and log into the DSIR Insights E-Portal. Submit the comprehensive online profile.Open portal
2
Fill out Form 3CK online and upload all mandatory data.Open portal
3
Print the complete submitted online dossier, sign/seal every page, and post hard copies to the DSIR Head Office.
4
Upload audited financial breakdowns through the Income Tax Department e-Filing Portal by October 31st each year.

Frequently asked questions

Who is eligible for Section 35?

Section 35 is available to Private Limited, LLP companies at the Pre-Revenue, Early Stage (Revenue < ₹1Cr), Growth Stage (₹1Cr–₹25Cr), Scaling (₹25Cr+) stage, across all Indian states (nationwide).

How much funding does Section 35 provide?

Section 35 provides up to —.

How long does Section 35 approval take?

The typical processing time from submission to disbursement is 16–52 weeks.

Is Section 35 currently accepting applications?

Yes, Section 35 is currently active and accepting applications. Application window: Open year-round.

Ready to apply for R&D Tax Deduction — Section 35?

Find out in minutes if you meet the eligibility criteria — and discover every other government scheme your startup qualifies for, at no cost.

Check eligibility — free

Information is based on publicly available scheme guidelines. Last verified 19 May 2026. Always verify with official sources before applying.