Deduction in respect of royalty on patents
78. (1) A person shall be allowed a deduction of an amount specified in sub-section (4) in respect of any income referred to in sub-section (3), if such income is included in his 'gross total income from ordinary sources'.
(2) The deduction under sub-section (1) shall be allowed to a person, if he is a resident individual and a patentee.
(3) The income referred to in sub-section (1) shall be any income received by the person by way of royalty in respect of a patent registered on or after the 1st day of April, 2003 under the Patents Act, 1970.
(4) The amount of deduction under sub-section (1) shall be the amount of income referred to in sub-section (3) to the extent it does not exceed,-
(a) the amount of royalty allowable under the terms and conditions of a license settled by the Controller under the Patents Act, 1970, if a compulsory licence is granted in respect of any patent under that Act; and
(b) three hundred thousand rupees.