{"id":3751,"date":"2021-07-24T19:38:51","date_gmt":"2021-07-24T19:38:51","guid":{"rendered":"http:\/\/caindelhiindia.com\/blog\/?p=3751"},"modified":"2021-08-25T07:02:15","modified_gmt":"2021-08-25T07:02:15","slug":"read-all-about-royalty-taxatio-under-income-tax-act","status":"publish","type":"post","link":"https:\/\/www.caindelhiindia.com\/blog\/read-all-about-royalty-taxatio-under-income-tax-act\/","title":{"rendered":"Read All About Royalty Taxatio Under Income Tax Act"},"content":{"rendered":"<figure id=\"attachment_3761\" aria-describedby=\"caption-attachment-3761\" style=\"width: 954px\" class=\"wp-caption alignnone\"><a href=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/07\/TAXATION-ROYALTY-UNDER-INCOME-TAX.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-3761\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/07\/TAXATION-ROYALTY-UNDER-INCOME-TAX.jpg\" alt=\"TAXATION ROYALTY UNDER INCOME TAX\" width=\"954\" height=\"534\" \/><\/a><figcaption id=\"caption-attachment-3761\" class=\"wp-caption-text\"><span style=\"color: #ffffff;\">TAXATION ROYALTY UNDER INCOME TAX<\/span><\/figcaption><\/figure>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69eaceb0c9219\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69eaceb0c9219\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.caindelhiindia.com\/blog\/read-all-about-royalty-taxatio-under-income-tax-act\/#READ_ALL_ABOUT_ROYALTY_TAXATION_UNDER_INCOME_TAX_ACT_1961\" title=\"READ ALL ABOUT ROYALTY TAXATION UNDER INCOME TAX ACT, 1961\">READ ALL ABOUT ROYALTY TAXATION UNDER INCOME TAX ACT, 1961<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.caindelhiindia.com\/blog\/read-all-about-royalty-taxatio-under-income-tax-act\/#BRIEF_INTRODUCTION\" title=\"BRIEF INTRODUCTION\">BRIEF INTRODUCTION<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.caindelhiindia.com\/blog\/read-all-about-royalty-taxatio-under-income-tax-act\/#OBJECTIVE\" title=\"OBJECTIVE\">OBJECTIVE<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.caindelhiindia.com\/blog\/read-all-about-royalty-taxatio-under-income-tax-act\/#EXPLANATION_UNDER_FINANCE_ACT_2014\" title=\"EXPLANATION UNDER FINANCE ACT 2014\">EXPLANATION UNDER FINANCE ACT 2014<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.caindelhiindia.com\/blog\/read-all-about-royalty-taxatio-under-income-tax-act\/#ROYALTY_%E2%80%93_INTERPRETATION_ISSUES_UNDER_ITA\" title=\"ROYALTY \u2013 INTERPRETATION ISSUES UNDER ITA\">ROYALTY \u2013 INTERPRETATION ISSUES UNDER ITA<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.caindelhiindia.com\/blog\/read-all-about-royalty-taxatio-under-income-tax-act\/#EXCEPTION_OF_CAPITAL_GAIN\" title=\"EXCEPTION OF\u00a0CAPITAL GAIN\">EXCEPTION OF\u00a0CAPITAL GAIN<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.caindelhiindia.com\/blog\/read-all-about-royalty-taxatio-under-income-tax-act\/#DEEMING_RULES_UNDER_THE_ITA\" title=\"DEEMING RULES UNDER THE ITA\">DEEMING RULES UNDER THE ITA<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.caindelhiindia.com\/blog\/read-all-about-royalty-taxatio-under-income-tax-act\/#Deduction_for_any_income_received_as_a_result_of_a_patent_royalty-_Deduction_of_Patent_Royalty_Under_Section_80RRB\" title=\"Deduction for any income received as a result of a patent royalty- Deduction of Patent Royalty (Under Section 80RRB):\">Deduction for any income received as a result of a patent royalty- Deduction of Patent Royalty (Under Section 80RRB):<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.caindelhiindia.com\/blog\/read-all-about-royalty-taxatio-under-income-tax-act\/#SUMMARY\" title=\"SUMMARY\">SUMMARY<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"READ_ALL_ABOUT_ROYALTY_TAXATION_UNDER_INCOME_TAX_ACT_1961\"><\/span><span style=\"color: #ff0000;\">READ ALL ABOUT ROYALTY <\/span><span style=\"color: #ff0000;\">TAXATION <\/span><span style=\"color: #ff0000;\">UNDER INCOME TAX ACT, 1961<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"BRIEF_INTRODUCTION\"><\/span><span style=\"color: #000080;\"><strong>BRIEF INTRODUCTION<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Royalty refers to the payment made in any kind and the same is received as consideration for\u00a0the utilization\u00a0of any intangible property like patent, copyright, design or model, secret formula or process, trademark,\u00a0name\u00a0or for information concerning industrial, commercial or scientific experience.<\/p>\n<p>Royalty ensures that its owner of possess the domain knowledge of the intangible asset and thus, only permits\u00a0for the utilization\u00a0of the said intangible property.<\/p>\n<p>Ownership of intangible\u00a0assets are legally secured. Where intangible property is legally secured, there are certain test which needs to be applied, in case of transfer of rights in property. But where the owner of\u00a0intangible asset\u00a0is also the economic owner, the character\u00a0of rights enjoyed would be dependent on\u00a0the provisions provided in the domestic law.<\/p>\n<p>Although the concept of economic ownership is\u00a0not recognized in reality in India, royalty contracts are generally made under licensing agreements. The consideration of for such agreements are determined as a percentage of gross or\u00a0income\u00a0to be derived by utilizing the said asset.<\/p>\n<p>Transfer pricing regulations have been introduced in order to provide for arm\u2019s length pricing of international transactions. These transactions also involve payment in respect of royalties and the same shall be determined by comparing the results or conditions of controlled transactions to the results available under comparable uncontrolled transactions.<\/p>\n<figure id=\"attachment_3759\" aria-describedby=\"caption-attachment-3759\" style=\"width: 898px\" class=\"wp-caption alignnone\"><a href=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/07\/Picture6.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-3759\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/07\/Picture6.jpg\" alt=\"Picture6\" width=\"898\" height=\"418\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/07\/Picture6.jpg 597w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/07\/Picture6-300x140.jpg 300w\" sizes=\"(max-width: 898px) 100vw, 898px\" \/><\/a><figcaption id=\"caption-attachment-3759\" class=\"wp-caption-text\"><span style=\"color: #ffffff;\">Picture6<\/span><\/figcaption><\/figure>\n<h3><span class=\"ez-toc-section\" id=\"OBJECTIVE\"><\/span><span style=\"color: #000080;\"><strong>OBJECTIVE<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Simplification and rationalization of non-resident taxation<\/li>\n<li>Reduce administrative difficulties and uncertainties.<\/li>\n<li>Ensuring gross income of basis of tax for NRI, instead of\u00a0net profit\u00a0basis of tax.<\/li>\n<\/ul>\n<figure id=\"attachment_3757\" aria-describedby=\"caption-attachment-3757\" style=\"width: 941px\" class=\"wp-caption alignnone\"><a href=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/07\/Picture5.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-3757\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/07\/Picture5.jpg\" alt=\"Picture5\" width=\"941\" height=\"538\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/07\/Picture5.jpg 668w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/07\/Picture5-300x172.jpg 300w\" sizes=\"(max-width: 941px) 100vw, 941px\" \/><\/a><figcaption id=\"caption-attachment-3757\" class=\"wp-caption-text\">Picture5<\/figcaption><\/figure>\n<h3><span class=\"ez-toc-section\" id=\"EXPLANATION_UNDER_FINANCE_ACT_2014\"><\/span><span style=\"color: #000080;\"><strong>EXPLANATION UNDER FINANCE ACT 2014<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<figure id=\"attachment_3756\" aria-describedby=\"caption-attachment-3756\" style=\"width: 943px\" class=\"wp-caption alignnone\"><a href=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/07\/Picture4.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-3756\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/07\/Picture4.jpg\" alt=\"Picture4\" width=\"943\" height=\"533\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/07\/Picture4.jpg 619w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/07\/Picture4-300x170.jpg 300w\" sizes=\"(max-width: 943px) 100vw, 943px\" \/><\/a><figcaption id=\"caption-attachment-3756\" class=\"wp-caption-text\"><span style=\"color: #ffffff;\">Picture4<\/span><\/figcaption><\/figure>\n<p><span style=\"color: #000080;\"><strong>EXEMPTED ROYALTY<\/strong><\/span><\/p>\n<p>Royalty payment made in respect of computer software shall be exempt provided &#8211;<\/p>\n<ul>\n<li>Lump consideration\u00a0is made\u00a0by a resident.<\/li>\n<li>For transfer of all or any rights\u00a0regarding\u00a0computer software supplied\u00a0together with\u00a0a computer or computer-based equipment<\/li>\n<li>By a non-resident manufacturer<\/li>\n<li>The same has been transferred under any approved scheme of Policy on Computer Software Export, Software Development and Training, 1986 of\u00a0the govt.\u00a0of Indi<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"ROYALTY_%E2%80%93_INTERPRETATION_ISSUES_UNDER_ITA\"><\/span><span style=\"color: #000080;\"><strong>ROYALTY \u2013 INTERPRETATION ISSUES UNDER ITA<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<table style=\"height: 1743px;\" width=\"952\">\n<tbody>\n<tr>\n<td width=\"210\"><strong><span style=\"color: #000080;\">ISSUE IN INTERPRETATION<\/span><\/strong><\/td>\n<td width=\"288\"><strong><span style=\"color: #000080;\">CLARIFICATION<\/span><\/strong><\/td>\n<td width=\"170\"><strong><span style=\"color: #000080;\">REFERENCE TO RULING PROVIDED<\/span><\/strong><\/td>\n<\/tr>\n<tr>\n<td width=\"210\">MEANING OF \u2018IMPARTING OF INFORMATION CONCERNING TECHNICAL, INDUSTRIAL, COMMERCIAL OR SCIENTIFIC KNOWLEDGE, EXPERIENCE OR SKILL\u2019 (\u2018KNOW-HOW\u2019)<\/td>\n<td width=\"288\">EVERY INFORMATION CONCERNING THE INDUSTRIES OR COMMERCIAL VENTURES DOES NOT QUALIFY AS ROYALTY. EXPERTISE AND SKILL REQUIRED TO SOME EXTENT. CONFIDENTIALITY\/ SECRECY &amp; EXCLUSIVITY IS REQUIRED TO SOME EXTENT. THE SAME \u00a0NOT BE SOMETHING READILY AVAILABLE IN THE MARKET.<\/td>\n<td width=\"170\">(CIT VS. HEG LTD. (263 ITR 230) (MP)<\/td>\n<\/tr>\n<tr>\n<td width=\"210\"><\/td>\n<td width=\"288\">ALLOWING ACCESS AND DOWNLOADING BUSINESS INFORMATION REPORTS, WHICH IS A COMPILATION OF PUBLICLY AVAILABLE COMMERCIAL INFORMATION IS NOT ROYALTY.<\/td>\n<td width=\"170\">(DUN &amp; BRADSTREET ESPANA SA (272 ITR 99) (AAR)<\/td>\n<\/tr>\n<tr>\n<td width=\"210\">DEFINITION OF USE<\/td>\n<td width=\"288\">THE APPLICATION OR EMPLOYMENT OF SOMETHING; A LONG-CONTINUED POSSESSION AND EMPLOYMENT OF A THING FOR THE PURPOSE FOR WHICH IT IS ADAPTED (BLACK LAW DICTIONARY) CRITERIA FOR DETERMINATION OF RIGHT TO USE OR USE OF EQUIPMENT (OECD TAG REPORT)<\/p>\n<ul>\n<li>CUSTOMER SHALL BE HAVING THE PHYSICAL CONTROL \/ POSSESSION OVER THE ASSER.<\/li>\n<li>CUSTOMER BE HAVING SIGNIFICANT INTEREST IN THE SAID ASSET.<\/li>\n<li>PROVIDER SHALL NOT GUARANTEE ITS REVENUES.<\/li>\n<li>PROVIDER NOT TO USE THE SAID PROPERTY IN ORDER TO PROVIDE SERVICES TO OTHERS.<\/li>\n<li>USE OR RIGHT TO USE DEPENDS ON THE RELATION WHICH EXISTS AS A MATTER OF FACT BETWEEN THE PERSON AND THE PROPERTY (TOURAPARK PTY LTD V FCT [12 ATR 842])<\/li>\n<\/ul>\n<\/td>\n<td width=\"170\">(TOURAPARK PTY LTD V FCT [12 ATR 842])<\/td>\n<\/tr>\n<tr>\n<td width=\"210\"><\/td>\n<td width=\"288\">THE WORD \u2018USE\u2019 (OF COPYRIGHT) SHALL NOT BE INTERPRETED IN GENERIC SENSE. THE EMPHASIS HAS BEEN MADE ON \u2018USE OF COPYRIGHT OR THE RIGHT TO USE IT\u2019. THUS, WHERE THE EXCLUSIVE RIGHTS, WHICH THE OWNER OF COPYRIGHT HOLDS, IS PRIVIDED TO THE CUSTOMER, EITHER PERMANENTLY OR FOR A FIXED DURATION OF TIME AND THE PERSON MAKE A BUSINESS OUT OF IT, THE SAME SHALL BE EXCLUDED WITHIN THE AMBIT OF USE OR RIGHT TO USE THE COPYRIGHT.<\/td>\n<td width=\"170\">(FACTSET RESEARCH SYSTEMS INC [182 TAXMAN 268])<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h3><span class=\"ez-toc-section\" id=\"EXCEPTION_OF_CAPITAL_GAIN\"><\/span><span style=\"color: #000080;\"><strong>EXCEPTION OF\u00a0CAPITAL GAIN<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The definition of royalty excludes any consideration\u00a0which might\u00a0be income of the recipient chargeable under\u00a0the pinnacle\u00a0\u2018Capital gains.<\/p>\n<ul>\n<li>Clause (i) and (iv) of the definition of royalty provides that transfer of all or any rights in respect of patent, invention, model, design, secret formula or process or trade mark, copyright, literary, artistic or scientific work, etc. would constitute royalty.<\/li>\n<li>Definition of \u2018transfer\u2019 includes extinguishment of any rights\u00a0within the\u00a0asset as per section 2(47) of the Act.<\/li>\n<li>Whether the transfer of all or any rights in patent, copyright, etc.\u00a0may be\u00a0treated as extinguishment of any right\u00a0within the\u00a0asset thereby chargeable under\u00a0the top\u00a0\u2018Capital Gains\u2019.<\/li>\n<li>Tests\u00a0to work out\u00a0whether transfer of all or any rights in asset would constitute royalty.<\/li>\n<li>Ownership of the patent, copyright, etc.\u00a0isn&#8217;t\u00a0transferred [HCL Limited (ITA nos. 93\/2002 &amp; 120\/2008), Delhi Trib.]<\/li>\n<li>The asset is appearing\u00a0within the\u00a0books of transferor.<\/li>\n<li>The income received by the transferor is treated as revenue receipt [Koyo Seiko Co. Ltd 233 ITR 421 (Andhra Pradesh HC)]<\/li>\n<li>The transferor\u00a0doesn&#8217;t\u00a0forego his right to use the patent, copyright, etc. even after the rights are granted\/ transferred to the transferee. [Dr. K.P. Karanth 139 ITR 479 (AP High Court)]<\/li>\n<li>The transferee\u00a0doesn&#8217;t\u00a0get enduring benefit out of the rights transferred.<\/li>\n<li>The transferee treats the payment made for rights as revenue expenditure.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"DEEMING_RULES_UNDER_THE_ITA\"><\/span><span style=\"color: #000080;\"><strong>DEEMING RULES UNDER THE ITA<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><strong>Income by way of royalty payable by\u2014<\/strong><\/p>\n<ol>\n<li>the Government; or<\/li>\n<li>the individual shall be an Indian resident, except for the cases, where the royalty has been paid in respect of any right, property or information used or services, being utilized for\u00a0the purpose\u00a0of any business or profession carried on by such person and the same is carried out outside India or is used for earning any income from any source outside India; or<\/li>\n<li>the individual, being a non-resident, and the royalty has been paid in respect of any right, property or information used or services utilized for the purpose of running a business or profession in India or for the needs of constructing or earning any sough of income from any source in India:<\/li>\n<\/ol>\n<p>A.:<\/p>\n<figure id=\"attachment_3754\" aria-describedby=\"caption-attachment-3754\" style=\"width: 919px\" class=\"wp-caption alignnone\"><a href=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/07\/Picture-A.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-3754\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/07\/Picture-A.jpg\" alt=\"Picture A\" width=\"919\" height=\"437\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/07\/Picture-A.jpg 534w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/07\/Picture-A-300x143.jpg 300w\" sizes=\"(max-width: 919px) 100vw, 919px\" \/><\/a><figcaption id=\"caption-attachment-3754\" class=\"wp-caption-text\">Picture A<\/figcaption><\/figure>\n<p>&nbsp;<\/p>\n<p>B. :<\/p>\n<figure id=\"attachment_3753\" aria-describedby=\"caption-attachment-3753\" style=\"width: 928px\" class=\"wp-caption alignnone\"><a href=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/07\/Picture-B.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-3753\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/07\/Picture-B.jpg\" alt=\"Picture B\" width=\"928\" height=\"663\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/07\/Picture-B.jpg 624w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/07\/Picture-B-300x214.jpg 300w\" sizes=\"(max-width: 928px) 100vw, 928px\" \/><\/a><figcaption id=\"caption-attachment-3753\" class=\"wp-caption-text\"><span style=\"color: #ffffff;\">Picture B<\/span><\/figcaption><\/figure>\n<p>&nbsp;<\/p>\n<p>C.:<\/p>\n<p><a href=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/07\/PictureC.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-3752\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/07\/PictureC.jpg\" alt=\"Picture C\" width=\"897\" height=\"876\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/07\/PictureC.jpg 558w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/07\/PictureC-300x293.jpg 300w\" sizes=\"(max-width: 897px) 100vw, 897px\" \/><\/a><\/p>\n<p>&nbsp;<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Deduction_for_any_income_received_as_a_result_of_a_patent_royalty-_Deduction_of_Patent_Royalty_Under_Section_80RRB\"><\/span><span style=\"color: #000080;\"><strong><em>Deduction for any income received as a result of a patent royalty- Deduction of Patent Royalty (Under Section 80RRB):<\/em><\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Under Section 80RRB any royalty income received on or after April 1, 2003, under the Patents Act 1970, is eligible for a deduction of up to Rs.3 lakh or the income received, whichever is less. The taxpayer must be a single patentee who is also an Indian resident. A certificate in the required form, duly signed by the prescribed authority, must be provided by the taxpayer.<\/p>\n<table style=\"height: 89px;\" width=\"952\">\n<tbody>\n<tr>\n<td><strong>80RRB<\/strong><\/td>\n<td><strong>Deductions on Income by way of Royalty of a Patent<\/strong><\/td>\n<td><strong>Lower of INR 3 lakhs or income received<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h3><span class=\"ez-toc-section\" id=\"SUMMARY\"><\/span><span style=\"color: #000080;\"><strong>SUMMARY<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<table style=\"height: 400px;\" width=\"962\">\n<tbody>\n<tr>\n<td><span style=\"color: #000080;\"><strong>PAYER OF ROYALTY<\/strong><\/span><\/td>\n<td><span style=\"color: #000080;\"><strong>UTILIZATION*<\/strong><\/span><\/td>\n<td><span style=\"color: #000080;\"><strong>TAXABLE IN INDIA<\/strong><\/span><\/td>\n<\/tr>\n<tr>\n<td>GOVERNMENT<\/td>\n<td>&#8211;<\/td>\n<td>YES<\/td>\n<\/tr>\n<tr>\n<td rowspan=\"2\">INDIAN RESIDENT<\/td>\n<td>IN INDIA<\/td>\n<td>YES<\/td>\n<\/tr>\n<tr>\n<td>OUTSIDE INDIA<\/td>\n<td>NO<\/td>\n<\/tr>\n<tr>\n<td rowspan=\"2\">NON-RESIDENT<\/td>\n<td>IN INDIA<\/td>\n<td>YES<\/td>\n<\/tr>\n<tr>\n<td>OUTSIDE INDIA<\/td>\n<td>NO<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>READ ALL ABOUT ROYALTY TAXATION UNDER INCOME TAX ACT, 1961 BRIEF INTRODUCTION Royalty refers to the payment made in any kind and the same is received as consideration for\u00a0the utilization\u00a0of any intangible property like patent, copyright, design or model, secret formula or process, trademark,\u00a0name\u00a0or for information concerning industrial, commercial or scientific experience. Royalty ensures that &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[142],"tags":[853],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/3751"}],"collection":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/comments?post=3751"}],"version-history":[{"count":5,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/3751\/revisions"}],"predecessor-version":[{"id":3803,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/3751\/revisions\/3803"}],"wp:attachment":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/media?parent=3751"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/categories?post=3751"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/tags?post=3751"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}