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What is Deduction in respect of royalty on patents? Section 80RRB of Income Tax Act 1961

Deduction in respect of royalty on patents is defined under section 80RRB of Income Tax Act 1961. Provisions under this Section is:

Section 80 RRB of Income Tax Act "Deduction in respect of royalty on patents"

Section 80RRB. (1) Where in the case of an assessee, being an individual, who is-
(a) resident in India;
(b) a patentee;
(c) in receipt of any income by way of royalty in respect of a patent registered on or after the 1st day of April, 2003 under the Patents Act, 1970 (39 of 1970), and

his gross total income of the previous year includes royalty, there shall, in accordance with and subject to the provisions of this section, be allowed a deduction, from such income, of an amount equal to the whole of such income or three lakh rupees, whichever is less:

 

Provided that where a compulsory licence is granted in respect of any patent under the Patents Act, 1970 (39 of 1970), the income by way of royalty for the purpose of allowing deduction under this section shall not exceed the amount of royalty under the terms and conditions of a licence settled by the Controller under that Act :

Provided further that in respect of any income earned from any source outside India, so much of the income, shall be taken into account for the purpose of this section as is brought into India by, or on behalf of, the assessee in convertible foreign exchange within a period of six months from the end of the previous year in which such income is earned or within such further period as the competent authority referred to in clause (c) of the Explanation to section 80QQB may allow in this behalf.

(2) No deduction under this section shall be allowed unless the assessee furnishes a certificate in the prescribed form20, duly signed by the prescribed authority21, along with the return of income setting forth such particulars as may be prescribed.

(3) No deduction under this section shall be allowed in respect of any income earned from any source outside India, unless the assessee furnishes a certificate in the prescribed form22, from the authority or authorities, as may be prescribed23, along with the return of income.
(4) Where a deduction for any previous year has been claimed and allowed in respect of any income referred to in this section, no deduction in respect of such income shall be allowed, under any other provision of this Act in any assessment year.
Explanation.-For the purposes of this section,-
(a) "Controller" shall have the meaning assigned to it in clause (b) of sub-section (1) of section 2 of the Patents Act, 1970 (39 of 1970);
(b) "lump sum" includes an advance payment on account of such royalties which is not returnable;
(c) "patent" means a patent (including a patent of addition) granted under the Patents Act, 1970 (39 of 1970);
(d) "patentee" means the person, being the true and first inventor of the invention, whose name is entered on the patent register as the patentee, in accordance with the Patents Act, 1970 (39 of 1970), and includes every such person, being the true and first inventor of the invention, where more than one person is registered as patentee under that Act in respect of that patent;
(e) "patent of addition" shall have the meaning assigned to it in clause (q) of sub-section (1) of section 2 of the Patents Act, 1970 (39 of 1970);
(f) "patented article" and "patented process" shall have the meanings respectively assigned to them in clause (o) of sub-section (1) of section 2 of the Patents Act, 1970 (39 of 1970);
(g) "royalty", in respect of a patent, means consideration (including any lump sum consideration but excluding any consideration which would be the income of the recipient chargeable under the head "Capital gains" or consideration for sale of product manufactured with the use of patented process or of the patented article for commercial use) for-
(i) the transfer of all or any rights (including the granting of a licence) in respect of a patent; or
(ii) the imparting of any information concerning the working of, or the use of, a patent; or
(iii) the use of any patent; or
(iv) the rendering of any services in connection with the activities referred to in sub-clauses (i) to (iii);
(h) "true and first inventor" shall have the meaning assigned to it in clause (y) of sub-section (1) of section 2 of the Patents Act, 1970 (39 of 1970).

Income Tax Act 1961

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What is Deduction in respect of professional income of authors of text books in Indian languages? Section 80QQA of Income Tax Act 1961

What is Deduction in respect of royalty income, etc., of authors of certain books other than text-books? Section 80QQB of Income Tax Act 1961

What is Deduction in respect of remuneration from certain foreign sources in the case of professors, teachers, etc? Section 80R of Income Tax Act 1961

What is Deduction in respect of professional income from foreign sources in certain cases? Section 80RR of Income Tax Act 1961

What is Deduction in respect of remuneration received for services rendered outside India? Section 80RRA of Income Tax Act 1961

What is Deduction in respect of royalty on patents? Section 80RRB of Income Tax Act 1961

What is Deduction in respect of interest on deposits in savings account? Section 80TTA of Income Tax Act 1961

What is Deduction in case of a person with disability? Section 80U of Income Tax Act 1961

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