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Section 80RRB Deduction

Section 80RRB deduction can be claimed by resident individuals, being a patentee, where his gross total income includes royalty income from Patent registered on or after 1 April, 2003 under the Patents Act, 1970. The amount of deduction allowed under Section 80RRB is upto Rs.3 lakhs.

However, where a compulsory licence is granted in respect of any patent under the Patents Act, 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 In respect of any income earned from any source outside India, so much of the income shall be taken into account 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 may allow in this behalf.

Section 80RRB Deduction

Form 10CCE Certificate

For claiming deduction under this section, the assessee is required to furnish a certificate in Form 10CCE. This Form is in two Parts. Part A is to be filled in by the assessee and Part B is to be filled in by the Controller General of Patents, Designs and Trade Marks. In order to file Form 10CCE logon to e-filing website. Under Tab 'e-file', Go to 'Prepare and Submit Online Form (other than ITR)'. Select Form 10CCE from the dropdown list and proceed to upload scanned copy of the Form in PDF or ZIP format. All the attachments should not exceed 50MB.

Form 10H Certificate

For claiming deduction in respect of any income earned from any source outside India, the assessee is required to furnish a certificate in Form 10H from 'competent authority'. The Certificate shall be usually issued by the bank through which the amount has been received in India. In order to file Form 10H logon to e-filing website. Under Tab 'e-file', Go to 'Prepare and Submit Online Form (other than ITR)'. Select Form 10H from the dropdown list and proceed to upload scanned copy of the form in PDF or ZIP format. All the attachment should not exceed 50MB. The assessee is also required to fill in a declaration online certifying that the particulars contained in the certificate are true and correct and nothing has been concealed.

Section 80RRB - Income Tax Act - Bare Act

After section 80RRA of the Income-tax Act, the following section shall be inserted with effect from the 1st day of April, 2004, namely :
80RRB.Deduction in respect of royalty on patents

  • 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 (c) 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 (b) of sub-section (1) 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);

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