Section 35 → Section 36
Expenditure on scientific research
Quick Answer
Section 35 of the Income Tax Act, 1961 (Expenditure on scientific research) corresponds to Section 36 of the Income-tax Act, 2025, effective 1st April 2026. Status: Retained.
What changed for Section 35
Under the Income Tax Act, 1961, Section 35 governs expenditure on scientific research. Deductions for revenue and capital expenditure on scientific research related to business, and contributions to approved research institutions.
From 1st April 2026, the same subject sits at Section 36 of the Income-tax Act, 2025 — retained and renumbered as Section 36 of the Income-tax Act, 2025. Weighted deductions (e.g., 150%) have been entirely phased out. Deduction is now restricted to 100% of the actual expenditure.
For Section 35, the practical impact is rated High. Impacts R&D budgets of pharma and tech companies.
Sec 35
Provision Summary
Deductions for revenue and capital expenditure on scientific research related to business, and contributions to approved research institutions.
Sec 36
Provision Summary
Weighted deductions (e.g., 150%) have been entirely phased out. Deduction is now restricted to 100% of the actual expenditure.
Key Changes & Highlights
- Alignment with simplified tax regimes which do not support weighted artificial deductions.
Related Articles from the Tax Academy
chapter via deductions
Section 80GGA: Guide to 100% Tax Deduction on Donations
Expert guide on Section 80GGA of the Income Tax Act. Understand eligibility, limits, and how to claim a 100% deduction on donations for scientific research and rural development.
corporate compliance
Income-tax Act, 2025 vs Income Tax 1961: A Corporate Compliance Guide
Expert analysis of the Income-tax Act, 2025 transition. A professional compliance guide for B2B enterprises on corporate tax changes, R&D credits, and audit requirements.
corporate compliance
Guide to Section 40(a)(ia) Disallowance in New Income-tax Act, 2025
A professional compliance guide for corporations on the transition from Section 40(a)(ia) of the Income Tax Act 1961 to the new 30% TDS disallowance rules in the Income-tax Act, 2025.
digital nomads saas
ITR-3 Loss Set-Off Rules for Tech Contractors Under Income-tax Act, 2025
A complete guide for SaaS founders & digital nomads on ITR-3 filing, setting off business losses, and GST compliance under the new Income-tax Act, 2025.
Frequently Asked Questions
What is Section 35 of the Income Tax Act, 1961 about?
Section 35 of the Income Tax Act, 1961 covers expenditure on scientific research. Deductions for revenue and capital expenditure on scientific research related to business, and contributions to approved research institutions.
Which section replaces Section 35 in the Income-tax Act, 2025?
Section 35 of the Income Tax Act, 1961 maps to Section 36 of the Income-tax Act, 2025, effective 1st April 2026 (status: Retained). Weighted deductions (e.g., 150%) have been entirely phased out. Deduction is now restricted to 100% of the actual expenditure.
What is the impact of the change to Section 35 under the new tax code?
The transition impact for Section 35 is rated High. Impacts R&D budgets of pharma and tech companies.
What should I watch out for when Section 35 moves to the 2025 code?
Alignment with simplified tax regimes which do not support weighted artificial deductions. These points are specific to Section 35 (Expenditure on scientific research).
Disclaimer: This mapping of Section 35 (Expenditure on scientific research) to Section 36 of the Income-tax Act, 2025 is for educational and reference purposes only, based on publicly available drafts and circulars. As Section 35 is currently marked Retained, always confirm its treatment with a qualified Chartered Accountant before filing or making compliance decisions.
Need professional help on Section 35?
Compare trusted providers — both offer CA services ready for the Income-tax Act, 2025.
*Affiliate links — we may earn a small commission at no extra cost to you. Disclosure.
Want to calculate tax on this section?