Patent royalty deduction allows resident patentees to deduct qualifying royalty income subject to license terms and a monetary ceiling.

A deduction is allowed for royalty income included in gross total income from ordinary sources where the taxpayer is a resident individual patentee and the royalty arises from patents meeting the registration requirement; the deduction is limited by the royalty amount determined under license terms settled by the Controller in cases of compulsory licence and by a statutory monetary ceiling.

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