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T. Banusekar

I AM an author of books on management.

Will the royalty received by me be exempt from tax?

R. L. Varshney

Reply

The Finance Act 2003 with effect from the assessment year 2004-05 allows a deduction in respect of royalty or copyright fees for authoring books to the extent of Rs 3,00,000 if the same is by way of a lump sum payment.

If the payment is not by way of a lump sum, the deduction, shall not exceed 15 per cent of the sale consideration of the books or Rs 3,00,000, whichever is less.

Books for this purpose will not include brochures, commentaries, diaries, journals, magazines, newspapers, pamphlets, school texts, tracts or other publications of a similar nature.

This deduction is provided for in Section 80QQA of the Act.

In the reader's case if the book is not in the nature of a commentary or a school text or any other publication of a similar nature, the reader will be entitled to the deduction as stated above.

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