What is Section 80-LA?
Updated on : Aug. 27, 2022 - noon 17 min read.
Section 80LA of the Income Tax Act, 1961 provides tax deductions to individuals who have income from royalties or patents. This section is particularly beneficial for individuals who have a source of income from royalties or patents and wish to avail tax deductions on the income earned from such sources.
Under section 80LA, an individual can claim a deduction of up to Rs. 3 lakhs per annum on the income earned from royalties or patents. The deduction is available for a period of 10 consecutive assessment years, starting from the year in which the income from royalties or patents is first included in the individual's total income.
To claim the deduction under section 80LA, the individual must satisfy the following conditions:
- The individual should be a resident of India.
- The income should be earned from patents or copyrights registered on or after April 1, 2003.
- The individual should own the patents or copyrights and should be the first registered owner.
- The individual should file a declaration in Form 10DA to claim the deduction under section 80LA.
Tax concession under this section is provided to Offshore Banking Unit and International Financial service center. Under this section, an eligible assessee will get a tax deduction on profit for a specified period provided certain conditions given under this section are satisfied.
Deduction under this section can be claimed by the following assessee:
- A scheduled bank or a foreign bank having an offshore banking unit in an SEZ;
- A unit of the International Financial Service Centre.
The deduction will be allowed for the following incomes included in the gross total income of such assessee:
- Income from offshore Banking Unit in an SEZ, or
- From any unit of the International Financial Service Centre
- Income from the banking business with:
- Undertaking located in an SEZ or
- Any undertaking which develops & operates or operates and maintains an SEZ.