Section 80RRB

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.

Eligibility:

  1. The individual claiming a deduction should be an Indian resident.
  2. Individuals who hold the original patents are eligible for the tax benefits.
  3. 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:

  1. Actual amount of royalties received, or
  2. Rs. 3,00,000

Note:
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.