Section 80RRB of Income Tax Act
Under Section 80RRB to allows deduction for patents(royalty income).
The right granted to the innovators is called a patent. When the innovator gives the right to use his or her patented project to some other person or entity, they receive a payment. This is said to be royalty income on a patent.
The deduction is Rs 3,00,000 or Income earned from "royalty of patent" whichever is less.
It is applicable only an Old Regime.
The following conditions are to be satisfied for eligible for claiming a deduction.
This deduction is only available for resident individuals.
The taxpayer must be an owner or co-owner of the patent and hold an original patent to apply for the deduction. With an original patent, one can apply for this deduction.
The original patent that the taxpayer has must be registered with the Patent Act of 1970.
The taxpayer must receive a royalty for a patent registered under the Patent Act after 31st march 2003.
The taxpayer must furnish an online certificate in FORM No. 10CCE, signed by the relevant authority with the return of income.