Concessional tax regime for Patent Royalty Income for resident patentees: Clause 194 (Table: S. No. 2) of Income Tax Bill, 2025 Vs. Section 115BBF of the Income-tax Act, 1961
3 May, 2025
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Concessional patent royalty regime offers lower tax for resident patentees subject to option, no deductions, and lockout on noncompliance. A concessional regime taxes royalty from patents developed and registered in India for resident patentees as gross income at a concessional rate, ... Summary
Concessional patent royalty regime offers lower tax for resident patentees subject to option, no deductions, and lockout on noncompliance.
A concessional regime taxes royalty from patents developed and registered in India for resident patentees as gross income at a concessional rate, disallowing any deduction; assessees must exercise a prescribed option within the prescribed time, and non compliance for any of five succeeding years triggers a five year ineligibility. Definitions require substantial in country development expenditure and exclude sale proceeds and capital gains from royalty.
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