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.
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.
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.
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
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.
Explanation : For the purposes of this section,
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