Section 80 RRB of Income Tax Act "Deduction in respect of royalty on patents"
80RRB. (1) Where in the case of an assessee, being an
individual, who is-
(a) resident in India;
(b) a patentee;
(c) in receipt of any income by way of royalty in respect of
a patent registered on or after the 1st day of April, 2003
under the Patents Act, 1970 (39 of 1970), and
his gross total income of the previous year includes
royalty, there shall, in accordance with and subject to the
provisions of this section, be allowed a deduction, from
such income, of an amount equal to the whole of such income
or three lakh rupees, whichever is less:
Provided that where a compulsory licence is granted in
respect of any patent under the Patents Act, 1970 (39 of
1970), the income by way of royalty for the purpose of
allowing deduction under this section shall not exceed the
amount of royalty under the terms and conditions of a
licence settled by the Controller under that Act :
Provided further that in respect of any income earned from
any source outside India, so much of the income, shall be
taken into account for the purpose of this section as is
brought into India by, or on behalf of, the assessee in
convertible foreign exchange within a period of six months
from the end of the previous year in which such income is
earned or within such further period as the competent
authority referred to in clause (c) of the Explanation to
section 80QQB may allow in this behalf.
(2) No deduction under this section shall be allowed unless
the assessee furnishes a certificate in the prescribed form,
duly signed by the prescribed authority, along with the
return of income setting forth such particulars as may be
prescribed.
(3) No deduction under this section shall be allowed in
respect of any income earned from any source outside India,
unless the assessee furnishes a certificate in the
prescribed form, from the authority or authorities, as may
be prescribed, along with the return of income.
(4) Where a deduction for any previous year has been claimed
and allowed in respect of any income referred to in this
section, no deduction in respect of such income shall be
allowed, under any other provision of this Act in any
assessment year.
Explanation.-For the purposes of this section,-
(a) "Controller" shall have the meaning assigned to it in
clause (b) of sub-section (1) of section 2 of the Patents
Act, 1970 (39 of 1970);
(b) "lump sum" includes an advance payment on account of
such royalties which is not returnable;
(c) "patent" means a patent (including a patent of addition)
granted under the Patents Act, 1970 (39 of 1970);
(d) "patentee" means the person, being the true and first
inventor of the invention, whose name is entered on the
patent register as the patentee, in accordance with the
Patents Act, 1970 (39 of 1970), and includes every such
person, being the true and first inventor of the invention,
where more than one person is registered as patentee under
that Act in respect of that patent;
(e) "patent of addition" shall have the meaning assigned to
it in clause (q) of sub-section (1) of section 2 of the
Patents Act, 1970 (39 of 1970);
(f) "patented article" and "patented process" shall have the
meanings respectively assigned to them in clause (o) of
sub-section (1) of section 2 of the Patents Act, 1970 (39 of
1970);
(g) "royalty", in respect of a patent, means consideration
(including any lump sum consideration but excluding any
consideration which would be the income of the recipient
chargeable under the head "Capital gains" or consideration
for sale of product manufactured with the use of patented
process or of the patented article for commercial use) for-
(i) the transfer of all or any rights (including the
granting of a licence) in respect of a patent; or
(ii) the imparting of any information concerning the working
of, or the use of, a patent; or
(iii) the use of any patent; or
(iv) the rendering of any services in connection with the
activities referred to in sub-clauses (i) to (iii);
(h) "true and first inventor" shall have the meaning
assigned to it in clause (y) of sub-section (1) of section 2
of the Patents Act, 1970 (39 of 1970).