Under which head income from royalty (book/patent) be taxed

If a person has income from royalty on patent/copyright fees from authoring books, under which head should this income be charged to tax?

I understand that the person can avail 80RRB/QQB deductions, but which section should the income be charged first? Is it 'Income from other Sources'? 

Replies (1)

 

 

 

 

 

Originally posted by : Diwakar

If a person has income from royalty on patent/copyright fees from authoring books, under which head should this income be charged to tax?

I understand that the person can avail 80RRB/QQB deductions, but which section should the income be charged first? Is it 'Income from other Sources'? 

 

some examples of income that is generally taxable under section 56(1), under the head "Income from other sources".


1) Insurance commission
2) Rent of plot of land
3) Interest on bank deposits and loans
4) Income from sub-letting
5) Casual income
6) Agricultural income received from outside India
Casual income includes the following:

  •  Income from royalty (if it is not income from business or profession)
  •  Directors' fee
  •  Income from undisclosed sources
  •  Salaries, payable to a Member of Parliament
  •  Ground rent
  •  Gratuities, paid to a Director who is not an employee of the company
  •  Family pension, received by the family members of a deceased employee.
  •  Interest on foreign Government securities etc. 

 

 

India’s Income-tax Act, 1961 (the “Act”) defines “royalty” to mean any consideration (including any lump sum consideration but excluding any consideration which would be the income of the recipient chargeable under the head “Capital Gains”).


44D & 44DA : Special provisions for computing income by way of royalties, etc., in the case of foreign companies.

 

80QQB: Deduction in respect of royalty income, etc., of authors of certain books other than text-books.

 

80RRB: Deduction in respect of royalty on patents

115A:  Tax on dividends, royalty and technical service fees in the case of foreign companies

See rule 9(2) for manner of computation of tax on royalty, etc., in certain cases.

194J: Fees for professional or technical services.

 

 

 

 

 

 

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