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Section 80QQB of the Income Tax Act, 1961 provides deduction in respect of royalty income of authors. Conditions to be satisfied for availing this benefit: 1. The taxpayer is an individual resident in India. 2. He is an author or joint author. 3. The book authored by him is work of literacy, artistic or scientific nature. However, the “books†shall not include brochures, commentaries, diaries, guides, journals, magazines, newspapers, pamphlets, text-books for schools, tracts and other publications of similar nature, by whatever name called. 4. The gross total income of the taxpayer includes any income, derived by him in the exercise of his profession, on account of any lump sum consideration for the assignment (or grant) of any of his interest in the copyright of the book, or of royalty or copyright fees (whether receivable in lump sum or otherwise) in respect of such book. Consideration includes an advance payment on account of such royalties or copyright fees, which is not returnable. 5. The taxpayer shall have a certificate in Form No. 10CCD from the person responsible for paying the income. 6. Deduction u/s 80QQB is not available unless it is claimed in the return of income. Amount of Deduction If the aforesaid conditions are satisfied, the deduction under this section shall be equal to the whole of such income referred above, or Rs. 3,00,000, whichever is less. Other key points • Where the eligible income is earned outside India, the deduction shall be allowed on so much of the income earned in foreign exchange, which is brought in India within six months from the end of the previous year or within such further period as the competent authority may allow in this behalf. For this purpose, competent authority shall mean the Reserve Bank of India or such other authority as is authorised under any law for the time being in force for regulating payments and dealing in foreign exchange. Moreover, deduction will not be allowed unless the taxpayer possess a certificate in Form 10H from the prescribed authority. • Where the income by way of royalty or the copyright fee, is not a lump sum consideration (in lieu of all rights of the assessee in the book) so much of the income (before allowing expenses attributable to such income) as in excess of 15% of the value of such books sold during the previous year, shall be ignored. • Where a deduction u/s 80QQB for any previous year has been claimed and allowed, no deduction in respect of such income shall be allowed under any other provision of the Act in any assessment year.
Income Tax Deduction in respect of Royalty income of authors
Direct Taxes (including International Taxation) | By ALOK PATNIA | Last updated on Oct 5, 2017
Section 80QQB of the Income Tax Act, 1961 provides deduction in respect of royalty income of authors. Conditions to be satisfied for availing this benefit: 1. The taxpayer is an individual resident in India. 2. He is an author or joint author. 3. The book authored by him is work of literacy, artistic or scientific nature. However, the “books†shall not include brochures, commentaries, diaries, guides, journals, magazines, newspapers, pamphlets, text-books for schools, tracts and other publications of similar nature, by whatever name called. 4. The gross total income of the taxpayer includes any income, derived by him in the exercise of his profession, on account of any lump sum consideration for the assignment (or grant) of any of his interest in the copyright of the book, or of royalty or copyright fees (whether receivable in lump sum or otherwise) in respect of such book. Consideration includes an advance payment on account of such royalties or copyright fees, which is not returnable. 5. The taxpayer shall have a certificate in Form No. 10CCD from the person responsible for paying the income. 6. Deduction u/s 80QQB is not available unless it is claimed in the return of income. Amount of Deduction If the aforesaid conditions are satisfied, the deduction under this section shall be equal to the whole of such income referred above, or Rs. 3,00,000, whichever is less. Other key points • Where the eligible income is earned outside India, the deduction shall be allowed on so much of the income earned in foreign exchange, which is brought in India within six months from the end of the previous year or within such further period as the competent authority may allow in this behalf. For this purpose, competent authority shall mean the Reserve Bank of India or such other authority as is authorised under any law for the time being in force for regulating payments and dealing in foreign exchange. Moreover, deduction will not be allowed unless the taxpayer possess a certificate in Form 10H from the prescribed authority. • Where the income by way of royalty or the copyright fee, is not a lump sum consideration (in lieu of all rights of the assessee in the book) so much of the income (before allowing expenses attributable to such income) as in excess of 15% of the value of such books sold during the previous year, shall be ignored. • Where a deduction u/s 80QQB for any previous year has been claimed and allowed, no deduction in respect of such income shall be allowed under any other provision of the Act in any assessment year.