‘Scientific Research’ means any activity for the extension of knowledge in the, fields of natural or applied science including agriculture, animal husbandry or fisheries. Expenditure incurred on scientific research includes all expenditure incurred for the prosecution, or the provision, of facilities for the prosecution of scientific research, but does not include any expenditure incurred in the acquisition of rights in, or arising out of Scientific Research.
Reference to Scientific Research related to a business or class of business includes:
(a) any scientific research which may lead to or facilitate an extension of that business, or as the case may be, all businesses of that class;
(b) any scientific research of a medical nature which has a special relation to the welfare of workers employed in that business or, as the case may be, all businesses of that class.
If any question arises as to whether any activity constitutes scientific research and if so, to what extent, the question shall be referred to the prescribed authority, whose decision shall be final.
Payment to National Laboratory (35 (2AA)]:
Where the assessee pays any sum to a National Laboratory with a specific direction that the said sum shall be used for scientific research undertaken under a programme approved in this behalf, then—
(a) there shall be allowed a deduction of a sum equal to one and one-fourth times the sum so paid,
(b) no deduction in respect of such sum shall be allowed under any other provision of the Income-tax Act.
Every National Laboratory desirous of obtaining approval under this sub-section shall make an application in the prescribed form and manner to the prescribed authority. The prescribed authority may before granting approval call for such documents or information from the National Laboratory as it thinks necessary in order to satisfy itself about the genuineness of the activities relating to scientific research of such Laboratory.
‘National. Laboratory’ means a scientific laboratory functioning under the aegies of the Indian Council of Agricultural Research, The Indian Council of Medical Research or the Council of Scientific and Industrial Research and which is approved as a National Laboratory by the prescribed authority, for this purpose.