Deduction in respect of royalty on patents.

1. (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. (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. (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. (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).] 80S. [Deduction in respect of compensation for termination of managing agency, etc., in the case of assessees other than companies.] Omitted by the Finance Act, 1986 (23 of 1986), s. 22 (w.e.f. 1-4-1987). Original section was introduced in place of old section 112 by the Finance (No. 2) Act, 1967 (20 of 1967), s. 33 and the Third Schedule (w.e.f. 1-4-1968). 80T. [Deduction in respect of long-term capital gains in the case of assessees other than companies.] Omitted by the Finance Act, 1987 (11 of 1987), s. 38 (w.e.f. 1-4-1988). Original section was inserted by the Finance (No. 2) Act, 1967 (20 of 1967), s. 33 and the Third Schedule (w.e.f. 1-4-1968) in replacement of section 114. 80TT. [Deduction in respect of winnings from lottery.] Omitted by the Finance Act, 1986 (23 of 1986), s. 24 (w.e.f. 1-4-1987). Original section was inserted by the Finance Act, 1972 (16 of 1972), s. 22 (w.e.f. 1-4-1972) and amended by the Finance (No. 2) Act, 1980, (w.e.f. 1-4-1981). 1[CA.—Deductions in respect of other incomes 80TTA.Deduction in respect of interest on deposits in savings account.—(1) Where the gross total income of an assesse 2[(other than the assessee referred to in section 80TTB)], being an individual or a Hindu undivided family, includes any income by way of interest on deposits (not being time deposits) in a savings account with—
   • (a) a banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act);
   • (b) a co-operative society engaged in carrying on the business of banking (including a co-operative land mortgage bank or a co-operative land development bank); or
   • (c) a Post Office as defined in clause (k) of section 2 of the Indian Post Office Act, 1898 (6 of 1898), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee a deduction as specified hereunder, namely:—
     • (i) in a case where the amount of such income does not exceed in the aggregate ten thousand rupees, the whole of such amount; and
     • (ii) in any other case, ten thousand rupees.
5. (2) Where the income referred to in this section is derived from any deposit in a savings account held by, or on behalf of, a firm, an association of persons or a body of individuals, no deduction shall be allowed under this section in respect of such income in computing the total income of any partner of the firm or any member of the association or any individual of the body. Explanation.—For the purposes of this section, “time deposits” means the deposits repayable on expiry of fixed periods.]

¹ Ins. by Act 32 of 2003, s. 45 (w.e.f. 1-4-2004).

¹ Ins. by Act 23 of 2012, s. 31 (w.e.f. 1-4-2013). 2. Ins. by Act 13 of 2018, s. 31 (w.e.f. 1-4-2019).