Under Section 139(4D) of the Income Tax Act, 1961, research institutions engaged in scientific, social, or statistical research must compulsorily file an Income Tax Return (ITR), even if their income is exempt under Section 10(21) or other provisions.
1. Applicability
This section applies to:
- Scientific Research Associations(exempt under Section 10(21)).
- Social Science Research Organizations.
- Statistical Research Institutions.
- Other approved research bodies(recognized by the government).
Key Condition:
- Filing is mandatory even if income is tax-exempt.
- Applies regardless of income level(no minimum threshold).
2. Due Date & Form
- Form ITR-7: Must be filed by 31st Octoberof the assessment year (e.g., 31 October 2025 for FY 2024-25).
- Belated Return: Can be filed by 31st December(with penalties).
3. Compliance Requirements
- Books of Accounts: Must be maintained (audit required if income exceeds ₹2.5L).
- Disclosures in ITR-7:
- Research grants received.
- Expenditure on research activities.
- Foreign funding (if any).
- Audit Report (Form 10B): Required if income > ₹2.5L.
4. Penalties for Non-Compliance
- Late Filing Fee: ₹100/day (max ₹5,000) under Section 234F.
- Loss of Exemption: Entire income may become taxable.
- Legal Action: Prosecution for false statements (Section 277).
