Section 80QQB of the Income Tax Act, 1961, is a tax-saving provision that offers deductions on royalty income earned by authors of certain literary, artistic, or scientific works. The provision is aimed at promoting creativity and encouraging authors to produce original and valuable works.
Under Section 80QQB, an author can claim a deduction of up to Rs. 3,00,000 from the gross total income for the assessment year. This deduction is available for resident individuals who are the authors of books in any of the following categories:
- Literary, artistic, or scientific works in the form of books, or any other publications that are not meant for the purpose of promoting any particular profession, business or industry.
- Technical or professional books that are meant for the use of professionals, such as engineers, doctors, lawyers, accountants, etc.
- Books that are approved by the National Book Trust of India or any other government-approved body.
To claim this deduction, the author must have earned royalty income from the sale of these books. Royalty income refers to the income that the author receives as a percentage of the sales revenue generated by the publication of the book. The author must also own the copyright of the book.
The deduction under Section 80QQB is available for a period of seven consecutive assessment years starting from the year in which the author earns the first royalty income from the book. If the author receives royalty income from more than one book, the deduction can be claimed for each book separately.
To claim the deduction, the author must file their income tax return, and attach a certificate from the publisher that verifies the royalty income earned during the year. The certificate must also mention the title of the book, the period for which the royalty income was earned, and the amount of royalty income earned during the year.
The deduction under Section 80QQB is available only to individuals, and not to HUFs, companies, or any other type of entity. The author must have received the royalty income during the previous year and must have paid tax on it.
It is important to note that the deduction is only available for royalty income earned from the sale of books, and not for any other type of literary, artistic or scientific work. The book must also be registered with the ISBN (International Standard Book Number) authority in India or any other country.
Additionally, the book must not be a text-book, guidebook or a book meant for imparting any kind of specialized knowledge, such as technical or scientific manuals. The deduction is also not available for income earned from the sale of e-books or digital content.
The deduction under Section 80QQB can be claimed in addition to other deductions available under the Income Tax Act. However, the total deductions claimed cannot exceed the total income earned during the assessment year.
In case an author receives royalty income from a book jointly authored with another person, both authors can claim the deduction separately, subject to a maximum limit of Rs. 1,50,000 each.
The certificate from the publisher verifying the royalty income earned must be obtained within six months from the end of the financial year in which the royalty income was earned. The certificate should be in the prescribed format and must be signed by the publisher.
In conclusion
Section 80QQB of the Income Tax Act is a beneficial provision for authors who have published books in certain categories. The deduction on royalty income earned not only incentivizes creativity but also recognizes the contribution of authors towards society. Authors who are eligible for this deduction should ensure that they claim it while filing their income tax returns.
Other Related Blogs: Section 144B Income Tax Act
Frequently Asked Questions (FAQs)
Q.1 Who can claim the deduction under Section 80QQB?
The deduction under Section 80QQB is available only to resident individuals who are authors of certain literary, artistic, or scientific works.
Q.2What is the maximum deduction that can be claimed under Section 80QQB?
The maximum deduction that can be claimed under Section 80QQB is Rs. 3,00,000 from the gross total income for the assessment year.
Q.3 What types of books are eligible for the deduction under Section 80QQB?
The following types of books are eligible for the deduction under Section 80QQB:
Literary, artistic, or scientific works in the form of books, or any other publications that are not meant for the purpose of promoting any particular profession, business, or industry.
Technical or professional books that are meant for the use of professionals, such as engineers, doctors, lawyers, accountants, etc.
Books that are approved by the National Book Trust of India or any other government-approved body.
Q.4 What is royalty income?
Royalty income refers to the income that an author receives as a percentage of the sales revenue generated by the publication of the book. The author must also own the copyright of the book.
Q.5 For how many years can the deduction under Section 80QQB be claimed?
The deduction under Section 80QQB can be claimed for a period of seven consecutive assessment years starting from the year in which the author earns the first royalty income from the book.
Q.6 Is the deduction under Section 80QQB available for e-books or digital content?
No, the deduction under Section 80QQB is not available for income earned from the sale of e-books or digital content.
Q.7 Is the deduction under Section 80QQB available to companies or HUFs?
No, the deduction under Section 80QQB is available only to individuals, and not to HUFs, companies, or any other type of entity.
Q.8 What documents are required to claim the deduction under Section 80QQB?
To claim the deduction under Section 80QQB, an author must file their income tax return, and attach a certificate from the publisher that verifies the royalty income earned during the year. The certificate must also mention the title of the book, the period for which the royalty income was earned, and the amount of royalty income earned during the year.
Q.9 Can joint authors claim the deduction under Section 80QQB?
Yes, if an author receives royalty income from a book jointly authored with another person, both authors can claim the deduction separately, subject to a maximum limit of Rs. 1,50,000 each.
