Deduction in respect of royalty on patents.
Section 8oRRB deduction is provided for taxpayers having income through royalty on a patent. The royalty received by an individual on his/her patent is eligible for tax deductions under this section. Thus, Section 80RRB deduction is aimed at encouraging innovation and patenting in India.
- The individual claiming a deduction should be an Indian resident.
- Individuals who hold the original patents are eligible for the tax benefits.
- The patent under section 80RRB in question should be registered under the Patent Act of 1970, either on or after April 1, 2003.
Quantum of deduction:
The least of the following will be allowed as deduction:
- Actual amount of royalties received, or
- Rs. 3,00,000
If the royalty payments received from the foreign country, then the deduction must be claimed within 6 months of the completion of the financial year in which the payment was received.