India is emerging as one of the most favoured destinations for collaborative R&D, bio-informatics, contract research and manufacturing and clinical research as a result of growing compliance with internationally harmonized standards such as Good Laboratory Practices, current Good Manufacturing Practices, Good Clinical Practices and patent laws.
As per the current provisions of the Income Tax Act, if a company engaged in the business of bio-technology, drugs and pharmaceuticals incurs any expenditure on scientific research, excluding cost of any land or building on in-house R&D facility, a deduction of a sum equal to 150 per cent of expenditure so incurred is allowed to encourage investment in R&D in pharma sector. Besides this, Income Tax Act also contains the provision of Section 80-IB (8A) under which for any company carrying on Scientific R&D, deduction of 100 per cent of profit and gains of such business for a period of 10 consecutive assessment years, beginning from the initial assessment year is allowed.
AdvertisementThis information was given by the Minister of State in the Ministry of Chemicals and Fertilizers Shri B.K. Handique in a written reply to a question in the Lok Sabha today.