royalty pyts

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rajkumar nadar (Querist)

21 July 2009 hi..my client is a teacher..and has a salary of 3.20 lcs for FY 2008-09 & she has also authore few books witha publishing house and every year she gets aroyaltry pytr of about 2.50 lacs. she also gets Rs 10000 p.m as car lease/ hire charges from her husband as the car is in her name.
my querry..
a) how to account the royalty pyts ( from form 16A) , can we show expenses & claim exemption.if yes..what type of expenses & to whhat extent..??
b) What about the income from car lease ..what are the expenses that can be claimed so that her overall income can be reduced to save tax.

which ITR form will she have to fill for her returns.

kinldly suggest.!!!

thanx in advance...

Abhishek Mohta

Abhishek Mohta (Expert)

21 July 2009 Royalty received by your client is against the book she wrote and is because of her intellectual skill alone and thus it is covered by the provisions of Profits & gains for Business or Profession.

Profession involves occupation requiring purely intellectual or manual skill - CIT v. Manmohan Das [1966] 59 ITR 699 (SC).

Thus she can claim any expenses incurred for writing the books which is covered in the sections from 30 to sec 43B.

Icome from car lease will be covered under the head income from other sources and if she had spend any amount to earn the lease rent then that will be allowed. for eg: if she is paying loan installment or petrol and maintainance charges then she can claim these expenses.

Regarding form she have to fill ITR - 4 for her return.

rajkumar nadar

rajkumar nadar (Querist)

22 July 2009 thanx a ton

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