Section 80QQB of ITA, 1961 : Section 80Qqb: Deduction In Respect Of Royalty Income, Etc, Of Authors Of Certain Books Other Than Text-Books

Explanation using Example

Imagine that Ravi is a resident Indian author who has recently published a novel. His gross total income for the financial year includes ₹4,00,000 that he received as a lump sum royalty payment for the novel. Under Section 80QQB of the Income-tax Act, 1961, Ravi can claim a deduction from his gross total income.

According to the provisions of this section, Ravi is eligible to deduct the whole amount of the royalty income or ₹3,00,000, whichever is less. In Ravi's case, since his royalty income is ₹4,00,000, he can claim a deduction of ₹3,00,000, which is the maximum allowable limit.

To claim this deduction, Ravi must furnish a certificate from the publisher, who is responsible for making the royalty payment, verifying the amount paid. This certificate must be submitted with Ravi's tax return. Additionally, if Ravi had earned any part of his income from outside India, he would need to ensure that it is brought into India in convertible foreign exchange within the stipulated time frame to qualify for the deduction under this section.

It is also important to note that once Ravi claims this deduction for his royalty income, he cannot claim any further deductions for this same income under any other provisions of the Act in any subsequent assessment year.