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Income tax on royalty

Paichuu (B.Com) (26 Points)

24 April 2015

I am selling my novels in digital format on amazon.com and earning around 25-30k pm as royalty.

I am also giving 30% tax on royalty to US government.

What is the tax treatment in india?

Regards

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4 Replies

anil jaiswal (student) (112 Points)
Replied 27 April 2015

Read section 90,90A, 91 of DTAA provisions of income tax act

Anubhav (Chartered Accountant) (429 Points)
Replied 27 April 2015

Hi Paichuu,

According to the Article 12 of DTAA with USA, Royalty if paid to a citizen of India will be taxable at the rate of 20% in case the payer of royalty is other than the Government of USA.

According to Section 5 of the Income tax Act, the total income of any previous year of a person who is a resident includes all income from whatever source derived which—

(a) is received or is deemed to be received in India in such year by or on behalf of such person ; or

(b) accrues or arises or is deemed to accrue or arise to him in India during such year ; or

Hence royalty from USA is accruing and arising to you outside India (considering you to be a resident of India), thus taxable in India.

This royalty income is doubly taxed, thus the Income Tax Act of India provides for relief in taxation. According to Section 90 relief will be available.

for any further information/queires, PM or mail me:

Anubhav Jain

anubhavjain176 @ gmail.com