In either of the cases, a deduction up to an amount of Rs 3 lakh from royalty income under Section 80QQB is allowed, subject to the condition that Form 10CCD is furnished and duly verified by the person responsible for making such payment along with the return of income.
By Chirag Nangia
Can income from royalty received on book sales from Indian e-publisher be shown under ‘other income’ in ITR1? Can the income from advertising in such books be reported as other income in the year of receipt? If such income is shown under ‘Other income’, can I claim deductions for charges paid for design-ing, online marketing, etc., or up to Rs 3 lakh income tax deduction u/s 80QQB, for artistic/ scientific books?
—Ashiesh Kapoor
An individual resident in India, as an author, receiving royalty from an Indian publisher on book sales can offer royalty income for tax under “Profit and Gains of Business or Profession” or “Other Sources” head of Income. In the former, particulars of such income must be reported in Form ITR 3 and expenses as deduction can be claimed. In the latter, Form ITR 1 has to be furnished and no expenses can be claimed as deduction.
In either of the cases, a deduction up to an amount of Rs 3 lakh from royalty income under Section 80QQB is allowed, subject to the condition that Form 10CCD is furnished and duly verified by the person responsible for making such payment along with the return of income. Further, if income comprises any amounts earned from any source outside India, Form no. 10H has to be furnished along with the return of income and such income is to be brought to India in convertible foreign exchange within six months from the end of the year or within the period allotted by RBI or other competent authority.
My spouse, aged 74, has an interest income of Rs 2.4 lakh and LTCG from sale of mutual funds of Rs 1,95,000 in FY 2021-22. Can she avail exemption under Section 80C?
—Sankar Datta
The LTCG on sale of equity-oriented mutual funds exceeding Rs 1 lakh is taxable at the rate of 10% plus cess plus surcharge (if applicable) with no indexation benefit. LTCG on sale of debt-oriented mutual funds is taxed at 20% plus cess plus surcharge after indexation. Further, no deduction is allowed u/s 80C in lieu of such LTCG. However, LTCG can be adjusted against the basic exemption limit, i.e., Rs 3 lakh. First, income apart from LTCG would be adjusted against the basic exemption limit and 80C deduction, and then the residual limit of basic exemption limit only would be adjusted against LTCG.
The writer is director, Nangia Andersen India. Send your queries to