The following Conditions should be Satisfied in order to claim Deduction under Section 80RRB in respect of any income by way of Royalty on Patents.
Essential conditions for claiming Deduction under this Section 80RRB :
(1) The deduction is available to an individual who is resident in India and is a patentee or copatentee.
(2) The patent should be registered under the Patents Act, 1970.
(3) His gross total income of the previous year includes royalty in respect of such patent.
Quantum of Deduction U/s 80RRB :
100% of such Royalty Income or Rs. 3,00,000, whichever is less.
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.
Further, where any income is earned from any source outside India, only 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 6 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.
(1) No deduction under this section shall be allowed unless the assessee furnishes a certificate in the prescribed form (Form No. 10CCD) duly signed by the prescribed authority, along with the return of income, setting forth such particulars as may be prescribed.
(2) 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 (Form No. 10H) from the prescribed authority, along with the return of income in the prescribed manner.
No Double Deduction:
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 the Act in any assessment year.