I am a college professor and I recently published a scientific book with an American publisher. Towards the end of this year I will be receiving some royalty depending upon the number of books sold world wide. They (publishers) are likely to deduct a flat 15% income tax on the royalty that will be deposited to the American tax authorities. This will go on every year My questions are: 1. Please clarify whether there are no foreign exchange violations in these transactions. 2.Please confirm that the royalty will not be taxed once again in India
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under section 80 QQB you are entitled to tax deduction of royalty income earned by you for publishing scientific book upto Rs 3 lakhs only
2) obtain certificate from the publishers in prescribed form 10 CCD
3)royalty income should be received by you within period of 6 months of end of previous year or with additional time as granted by RBI
4) in case royalty income is received by you as percentage of sale royalty income then royalty income greater than 15 per cent of sales is to be ignored
Hi,
There would be no FEMA violations if you receive the royalty through appropriate banking channels.
Regarding taxation of royalty, if you are a resident of India, then all your income, including global income (i.e. royalty) would get taxed in India. However, the tax deducted in USA would be allowed as a credit in India and you will be liable to pay only the incremental tax in India.
Trust this clarifies.
Regards,
Keerthiga Sharma
M.Com., CA, LL.B
1. Since the transactions are to be held in INR alone there is no violation in this as per FEMA, however you may be sure of the transactions either in INR or through foreign currency.
2. You can show the deduction of tax already made in your ITR filed in India, upon which you can claim exemption invoking double taxation (prevention) rules.
1. Within the sweep of Section 80QQB you may avail tax deduction on royalty income subject to a maximum of Rs.3 lakhs for publishing a scientific book.
2. If you are taxed in USA then obtain a certificate from the publisher in the prescribed form 10 CCD so that you can claim the benefit of avoidance of double taxation. Thereafter, you will be liable to only incremental taxation in India.
3. There is no FEMA violation if you receive the money in INR.
