What is Royalty on Patent
Patent is a unique invention made by a person.
Person making invention is called patentee
This patentee sometimes offer his technology or invention to some business who manufacture goods .Business offer patentee some share of profit to patentee in return
This share of profit is called Royalty on patents.
Deduction upto Royalty Income on Patens of Rs 300000 to certain patentee who are Resident under Section 80QRRB
This deduction available only to
who is Resident
who is Patentee [Developed a Patent]
Hence this deduction is not for
- Non Residents
- Assessee other than Individual (like HUF, Partnership, Companies)
Amount of deduction
Royalty income earned
Whichever is less
Sometimes,in public interest Government grants compulsory license to use patent.
In this case,Controller of Patents of the Government Settles the amount of Royalty Payable
In this case,Deduction under this Section cant be more than amount settled
How to claim deduction
Author should obtain certificates from publisher (person paying royalty) in prescribed Form (10 CCD)
In case of receipt from outside Countries, deduction will be available only on income which is brought into India within 6 months from end of previous year or within additional time as provided by competent authority (RBI)
For Example for FY 2014-15,
Previous year ends on 31 March 2015
Royalty income should be received in India by 6 months i..e. by 30 September 2015)
This time may be further extended by RBI
If deduction claimed here, then no deduction can be claimed under any other section.