Stealing is an art…………only if you do not get caught!!!!! What if you do get caught? Penalties, fines, imprisonment up your way, definitely. Or is it so definite? Definitely not. Confused?? Have a look into the two stories below: STORY 1:  Paul is a powerhouse of talent. Gifted with extra-ordinary brilliant mind and an equally colorful imagination, he conceived a revolutionary idea. An idea that will change the world. Or at least the entertainment world. He developed a technique that would enable to capture moving objects and animate them at the same instance. Excited….he called up his best buddy Mary and shared his happiness (along with his idea) and showed her the rough, yet to be full-fledged documented technique. He was supposed to hold a press conference and share his hard-earned discovery with the entire world. The next morning came as bolt from the blue!! Mary had already shared his discovery in the press-conference, very obviously on her own name. Heartbroken and aghast, Paul went to the lawyers to get back his rights and well…he was turned down yet again. Reason? He had no documentary proof of his ownership over his discovery. Hence he has no right to sue Mary. All he can do now is brood over his loss. STORY 2: Eton is a powerhouse of talent. Gifted with extra-ordinary brilliant mind and an equally colorful imagination, he conceived a revolutionary idea. An idea that will change the world. Or at least the entertainment world. He developed a technique that would enable to capture moving objects and animate them at the same instance. Even though extremely excited….the first thing that he did was consult a professional and get a copyright documented. And then the story went the same way. But, Eton had been smart enough to protect his idea! After the idea was released by his friend Eton went to the professional thought whom he got his idea protected to get back his rights. With all the documents and help, he sued Mary. Not only did he take back the right of own his discovery but also got Mary penalized. Protect your idea! Make it a property, get a Copyright. Same story….Different endings!! What was it that led Eton to justice? A thing called “COPYRIGHT”. Eton had not only conceived an idea, but he had also documented that and got it copyright protected. Copyright is mainly a negative right which is conferred by the Copyright Act 1957. It not only confers upon its author inter alia a right to prevent others from copying his or her work but also the right of an author to be recognized as the author (right of paternity) and moral rights; i, e. the right to prevent others from contaminating or spoiling the work so as not to bring disrepute to the author. Copyright is an Intellectual Property Right (IPR) already recognized. What do we do with the copyright? Well how thing work is people want to use the copyrighted property! But they can’t do so just by coming across it because they can be penalized. So, they go the owner of the copyright ask for a permission to use it, as a consideration to this permission the owner charges a certain amount from the buyer. Or the owner of the copyright even had the option of transferring the copyright to the desired person temporarily. As soon as a question of income arises taxation knocks at the door. What are the provisions for taxation? As discussed above there can be two scenarios- (a)   Transferring temporarily; or (b)    Permitting the use or enjoyment of, Income Tax on income from copyrights would be taxed under the head Profits and Gains from Business Profession, subject to a special deduction allowed under income from royalties. This special deduction can be availed to a maximum of Rs 300,000. However there are many other conditions for availing such deductions. Scope of Service Tax on Copyright: In the year 2010 income from copyrights was brought under the purview of service tax. Rate of Tax & Accounting Code:

This means that as long as Eton uses the idea, only for himself and does not sell it or rent it to others, he is well out of the ambit of service tax. Similarly, a work of music, when created or even performed by an artist or composer does not attract service tax. However, when the same piece of music is transferred to a sound recording company for consideration, it comes under the purview of service tax. _____________________________________________________________________________________________ Feel free to write to us,at [info@taxmantra.com] or call us at +91 88208208 11.