When authors write books and gives the content to the publisher to publish them, the publishers earn profits by selling the books. The publishers then pay an agreed amount of their profits or sales to the authors as their compensation for writing content for the books. This compensation is called as Royalty.The amounts that are included the royalty income are:
The benefit under this section will be available to the authors. The lower of the following will be deducted as income tax deduction:
Authors of India who are earning royalty income are benefited under section 80QQB. There are two major conditions that must be satisfied to be eligible for this tax deduction. They are:
|Income from profits and gains of business||8,00,000(5,00,000 + 3,00,000)|
|Less- Deductions under section 80QQB (Royalty income or 3 lakh whichever is less)||3,00,000|
|Net Income||5,00,000( 8,00,000-3,00,000)|
Working of his net income will be as follows:
|Income from profits and gains of business||5,00,000|
|Less- Deductions under section 80QQB||NIL|
Since Mr. Y has received remittance from foreign publisher after six months, he will not be getting benefit of any deduction under Section 80QQB.
The FORM 10CCD is a type of certificate that is to be obtained by the taxpayer from the person making payment to him or her. This is a compulsory document to vail deductions under section 80QQB. This form needs to be completed and signed by the individual or entity who is making the payment of the royalty to the taxpayer.
The format of the FORM 10CCD is
For the authors who get income in form of royalty are benefited with the deduction under Section 80QQB. If the individual is resident or resident but not ordinarily resident of India he or she is eligible for the deduction of Rs. 3 lakh or the royalty income whichever is less.
The authors get the deductions for the income earned in the form of royalty by them for writing books.
Any payment received as compensation for writing books or copyrighted works for the publication is called as Royalty.
The amount that is to be deducted under section 80QQB is Rs. 3 Lakh or the royalty income received, whichever is less.
Yes, the income from royalty is taxable under the head "Income from business and profession"
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