The term ‘Royalty’ defines the income received by the innovator against the usage of the patented innovation. The individual receiving such income can claim deduction under section 80RRB if they satisfy all the requisite conditions.
The present article explains all the provisions attached with deduction available under section 80RRB of the Income Tax Act.
1. The deduction under section 80RRB is available only to an individual.
2. The individual should be resident in India.
3. The individual should be a patentee.
Please note, patentee here means the person (one or more than one person), being the true and the first investor, whose name / names is entered on the patent register as the patentee.
4. The individual is receiving a royalty in respect of a patent registered on or after 1st April 2003 under the Patent Act, 1970.
Please note, Royalty in respect of a patent means consideration for the following –
However, it includes any lump sum consideration, but excludes the following –
5. The assessee claiming the deduction under section 80RRB is mandatorily required to furnish a certificate in Form No. 10CCE. Such a certificate in Form No. 10CCE should be duly signed by the prescribed authority. The certificate is to be filed at the time of filing of an income tax return.
The maximum amount of deduction available under section 80RRB is lower of the following –