Deduction for royalty on patents limits allowable deduction for resident patentees to specified caps and certification conditions.

Deduction permits a resident individual patentee of a patent registered on or after 1 April 2003 to deduct royalty income up to the whole amount or three lakh rupees, whichever is less; compulsory licences limit deductible royalty to the amount fixed by the Controller. Foreign-source royalty counts only if repatriated in convertible foreign exchange within six months (or permitted extension). Prescribed certificates must be furnished with the return of income. Key defined terms include Controller, lump sum, patent, patentee, and a comprehensive definition of royalty with specified exclusions.

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