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Section 80QQB of Income Tax Act

Authors who write books and present the same to publishers can avail deductions under Section 80QQB of the Income Tax Act 1961. The maximum amount available for deduction under this section is Rs 3,00,000 or original amount of royalty amount received (whichever is less).

One has to fulfill the following criteria to avail deductions under Section 80QQB

  • Individual must be a resident Indian or resident but not ordinarily resident in India.
  • He/She must file income tax returns to claim for the deduction.
  • Individuals should have either authored or co-authored a book which falls under the category of scientific work or literature or artistic.
  • In case if an individual fails to receive a lump sum amount of money or 15% of the value of the books sold during the year (before incurring any expenditure) should be ignored.
  • An individual must obtain Form 10CCD from the person who is responsible for making the payment.

The amount included in Royalty Income

  • Income earned by an author for practising his/her profession
  • Income earned in lumpsum as payment for assignment of any of his/her interests in the copyright of any book based on literary, scientific research, artistic and so on or of royalty or copyright fees for author’s book
  • Income received as advance payment of royalties or copyright fess

Amount of Deductions

The maximum amount of deduction available is lower of the following:

  • The total royalty amount of income received  Or
  • Rs 3,00,000

 

Particulars Amount
Income from Profits and Gains of Business (9,00,000 + 2,00,000) 11,00,000
Gross Total Annual Income 11,00,000
(-) Deductions  
Section 80QQB 3,00,000
Net Taxable Income 8,00,000
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