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Section 80RRB: Deductions on Income from Patent Royalty

Profiting from a patent is like the reward for doing a special job. Promoting individual income tax legislation - introduced Section 80RRB. Under this section deductions are paid to taxpayers to obtain income from royalty in copyright. The participant is eligible to apply for applications under section 80RRB. The main purpose is to promote copyright and the special work done by the people of India.

Meaning of Patent

New invention is a common practice in our country. Everything new is a blessing to society and good for the country. In every new invention, the founders received the same special right to the appropriate authorities. This gives them the authority to allow others to use their inventions for a limited time. The patent granted to the founders is called patent. All technical details regarding the establishment have been disclosed in the patent application. Copyright protects the intellectual property rights of the developer. In this way the founder can generate normal income by giving others the right to use their patented project The Tax Act defines Royal Profit as follows: "royalty", in relation to copyright, means consideration (which includes any consideration of the amount but does not include any consideration that may be the recipient's income paid under the heading " Major Benefits " or consideration of product sales made using a copyrighted process or copyrighted article for commercial use) ofβ€”

  • (i) the transfer of all rights (including licenses) in respect of copyright; or
  • (ii) the provision of any information relating to the operation, or use of the copyright; or (iii)
  • (iii) the use of any copyright; or
  • (iv) the provision of any services related to the functions referred to in subsections (i) to (iii);

What is Royalty income on patent?

When a developer grants a patent application to another person or organization, it receives a payment. This is called royalty revenue from patents. The founder usually establishes the idea. Some organizations use the same concept in producing a successful product that can be used for marketing purposes. The sale of these products generates revenue for the business. In this way the founders were given consideration in the form of royal income as a reimbursement for their use rights. The amount earned by the founders is the fixed price or percentage of the annual sales until the rights are exercised.

Concept of Section 80 RRB

Royalty copyright revenue is the amount earned by the founder against the use of new patented patents. This can include, books, inventions, music, art and more. These payments appear naturally over a specified period of time. People who earn this type of income in defiance of their innovations can claim a deduction under the section 80RRB , of the Income Tax Act, 1961.

Amount of Deduction under Section 80RRB

The amount deducted under section 80RRB is

  • Rs. 3 Lakh or
  • Revenue derived from "copyright",
  • any small.

Who is eligible for claiming deduction under section 80RRB?

There are a number of conditions that must be met in order to obtain a deduction from an application under section 80RRB. These are:

  • The person who wants to apply for a deduction must be a citizen of India (HUF or non-citizens are not allowed to apply for a deduction) .Only Indian citizens are eligible for this deduction.
  • The taxpayer must be the owner or one of the patent holders and have a real patent to apply for a seizure. Without a real copyright one cannot apply for this seizure.
  • The taxpayer's original intellectual property right must be registered with the Patent Act, 1970.
  • Proof of royalty payments must be issued in order to apply for an injunction.
  • The taxpayer must obtain a patent under the Copyright Act by 31 March 2003. This includes previous non-refundable benefits. Anything charged in the interest of money is not considered royal.
  • The inspector must refund the income in order to apply for an escape.
  • The taxpayer must provide an online certificate in FORM No. 10CCE, signed by the appropriate authorities and a refund for income.
  • If any deductions have already been made in the claim of monetary revenue over the years under section 80RRB, no deduction will be allowed for any other provision of the tax law for any year of assessment. That means no double tax will be deducted from any testing year.

Treatment of Royalty from foreign sources

If the proceeds from the revenue are derived from other external sources, deductions may be claimed but with a few additional conditions. These are:

  • The proceeds must be brought to India by the seller in exchangeable foreign currency.
  • The proceeds must be delivered to India within six months from the end of last year in the event of such receipt or within a period specified by the Reserve Bank of India (RBI) or other available authority. authorized.


This section saves income tax liabilities from copyright. If you are a new inventor and you are innovating get a patent to get the deductions under Section 80RRB. Get exclusive rights and enjoy the benefits of your invention. Against this salary you can apply for a deduction and reduce your tax liability. Unrealized deductions are money received or Rs. 3 lakh any lower.

Frequently asked questions

Developers may want to deduct revenue from the acquisition of new patents

Copyright holders Citizens of India are eligible to apply for a deduction from their patents.

Unwanted seizure up to Rs 3 lakh or actual royal payment received by the patent holder depending on the minimum amount.

Royalty can be 1/8 production or 12.8 percent production. However, it may differ depending on the royal clause in the lease agreement. (This question can be removed as the relevant data is not available. Copy the attached FYI-only content - ONGC makes a profit margin of 20 percent of the total value of oil on all output in the field regardless.)

Payments are agreed upon as a percentage of the total or total revenue derived from the use of an asset or a fixed amount per unit sold of an item. It could be a fixed annual price or a certain percentage of sales over a period of time.

Krishna Gopal Varshney

β€œKrishna Gopal Varshney co-founder & CEO of Myitronline is amongst the top emerging startups of Asia and authorized ERI by the Income Tax Department. A dedicated and tireless Expert Service Provider for the clients seeking tax filing assistance and all other essential requirements associated with Business/Professional establishment. Connect to us and let us give the Best Support to make you a Success. ”

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