Income tax on royalty

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

(c) accrues or arises to him outside India during such year

 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 

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