Income Tax FORM 11 for In-house R&D Facilities: Eligibility, Procedure and Compliance

Companies investing in in-house research and development often look to optimise their tax position through specific incentives provided under the Income-tax Act, 2025. One of the central compliance tools in this framework is FORM 11, prescribed under Rule 29 for entering into a formal agreement with the Department of Scientific and Industrial Research (DSIR).

This guide explains the statutory framework, coverage, filing requirements and ongoing obligations associated with FORM 11, and how it interfaces with the deduction available under Section 45(2) for in-house R&D facilities.

Important: Approval through FORM 11 is necessary but not, by itself, sufficient for claiming deduction. Actual allowance under Section 45(2) depends on meeting all legislative and procedural conditions and on verification by the Income Tax authorities.

Statutory Basis

The FORM 11 regime is anchored in the following provisions:

  • Section 45(2) of the Income-tax Act, 2025
    • Provides a deduction in respect of expenditure incurred by a company on an approved in-house research and development facility.
  • Rule 29 of the Income-tax Rules, 2026
    • Prescribes the procedure, conditions, forms and reporting framework for:
      • seeking approval of in-house R&D facilities,
      • entering into an agreement with DSIR, and
      • maintenance and audit of R&D accounts.

Within this framework:

  • Under the Income-tax Rules, 1962, the comparable form was Form 3CK under Rule 6 for Section 35.
  • Under the Income-tax Rules, 2026, the corresponding form is FORM 11 under RULE 29 for Section 45(2).

FORM 11 operationalises the agreement and approval process between the assessee-company and DSIR.

What is FORM 11?

FORM 11 is the statutory application-cum-agreement prescribed under Rule 29 for:

  • Entering into an agreement with DSIR for cooperation in relation to an in-house R&D facility; and
  • Ensuring audit and monitoring of the accounts maintained for such facility, for the specific purpose of availing deduction under Section 45(2) of the Income-tax Act, 2025.

In effect, FORM 11 is the formal gateway through which a company’s in-house R&D facility is brought within the monitored and approved framework necessary to claim tax benefits.

Objective and Scope of FORM 11

Purpose of Filing FORM 11

FORM 11 serves multiple legal and practical purposes:

  • To enable a company to seek approval of its in-house R&D facility from DSIR.
  • To record a binding agreement between the company and DSIR outlining mutual obligations, particularly about:
    • maintenance and audit of R&D accounts, and
    • submission of periodic information to DSIR and tax authorities.
  • To establish a compliance architecture so that claims under Section 45(2) can be examined on a verifiable and transparent basis.
  • To create the foundation for claiming deduction in respect of in-house R&D expenditure, subject to fulfilment of all statutory conditions.

Note: FORM 11 is concerned with in-house R&D facilities. Sponsored research projects are governed separately, particularly through Forms 7 to 10 under Section 45(3)(c) and do not fall under FORM 11.

Who is Required to File FORM 11?

FORM 11 is applicable only for a specific class of assessees and activities.