Quick Summary
The Income-tax Act, 2025 has introduced a structured compliance and reporting mechanism for companies claiming deductions on in-house research and development (RD) expenditure. One of the important components of this framework is FORM 12, prescribed under Section 45(2) read with Rule 29 of the Income-tax Rules, 2026. FORM 12 replaces the earlier reporting structure linked to Form 3CL under the Income-tax Act, 1961, and is designed to strengthen monitoring and verification of tax deductions clai
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FAQ :
Form 12 is a statutory report introduced to track and verify eligible R&D expenditure claims made by companies under Section 45(2) of the Income-tax Act, 2025.
Form 12 is not filed by the company claiming the deduction. Instead, it is furnished by the prescribed authority, such as the Secretary of the Department of Scientific and Industrial Research (DSIR), to the jurisdictional Chief Commissioner of Income-tax.
The purpose of Form 12 is to examine and evaluate in-house R&D facilities, certify their adequacy and recognition status, report eligible expenditures, and enable tax authorities to verify deduction claims.
No, Form 12 is a reporting and certification instrument. The final allowability of the deduction is subject to verification by the Income-tax Department during the assessment process.
Form 12 includes details about the company, the nature of its business and research objectives, the R&D facility, DSIR recognition, eligible capital and revenue expenditure, and information on asset disposal if applicable.
No, Form 12 is required to be furnished periodically for every approved in-house R&D facility, covering the expenditure incurred during the relevant tax year, making it an annual compliance document.
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