Income Tax Act, 2025
Section 4: Ins. by Act 27 of 1999, s. 56 (w.e.f. 11999).
4. Ins. by Act 27 of 1999, s. 56 (w.e.f. 11999).
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1[80RRB. Deduction in respect of royalty on patents.—(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);
Where in the case of an assessee, being
an individual, who is—
resident in India;
a patentee;
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
of the Explanation to section 80QQB may allow in this behalf.
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.
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.
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,—
“Controller” shall have the meaning assigned to it in clause
of sub-section
of section 2
of the Patents Act, 1970 (39 of 1970);
“lump sum” includes an advance payment on account of such royalties which is not
returnable;
“patent” means a patent (including a patent of addition) granted under the Patents Act, 1970
(39 of 1970);
“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;
“patent of addition” shall have the meaning assigned to it in clause
of sub-section
of
section 2 of the Patents Act, 1970 (39 of 1970);
“patented article” and “patented process” shall have the meanings respectively assigned to
them in clause
of sub-section
of section 2 of the Patents Act, 1970 (39 of 1970);