Section 115BBF → Section 121
Tax on income from patent
Quick Answer
Section 115BBF of the Income Tax Act, 1961 (Tax on income from patent) corresponds to Section 121 of the Income-tax Act, 2025, effective 1st April 2026. Status: Retained.
What changed for Section 115BBF
Under the Income Tax Act, 1961, Section 115BBF governs tax on income from patent. Provides a concessional tax rate of 10% on royalty income derived from patents developed and registered in India.
The new code maps this to Section 121: the provision is retained and renumbered as Section 121 of the Income-tax Act, 2025, applying from 1st April 2026. Retained. The 'Patent Box' regime designed to keep Intellectual Property (IP) ownership within India.
On the ground, changes to Section 115BBF carry a Medium impact. Highly beneficial for pharma and tech innovators.
Sec 115BBF
Provision Summary
Provides a concessional tax rate of 10% on royalty income derived from patents developed and registered in India.
Sec 121
Provision Summary
Retained. The 'Patent Box' regime designed to keep Intellectual Property (IP) ownership within India.
Key Changes & Highlights
- R&D expenditure tracking strictly linked to ensure the patent was genuinely 'developed' in India.
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Frequently Asked Questions
What does Section 115BBF of the Income Tax Act 1961 deal with?
Section 115BBF of the Income Tax Act, 1961 covers tax on income from patent. Provides a concessional tax rate of 10% on royalty income derived from patents developed and registered in India.
Where does Section 115BBF of the ITA 1961 go under the Income-tax Act, 2025?
Section 115BBF of the Income Tax Act, 1961 maps to Section 121 of the Income-tax Act, 2025, effective 1st April 2026 (status: Retained). Retained. The 'Patent Box' regime designed to keep Intellectual Property (IP) ownership within India.
Why does the change to Section 115BBF matter for taxpayers?
The transition impact for Section 115BBF is rated Medium. Highly beneficial for pharma and tech innovators.
What are the key changes to Section 115BBF under the Income-tax Act, 2025?
R&D expenditure tracking strictly linked to ensure the patent was genuinely 'developed' in India. These points are specific to Section 115BBF (Tax on income from patent).
Disclaimer: This mapping of Section 115BBF (Tax on income from patent) to Section 121 of the Income-tax Act, 2025 is for educational and reference purposes only, based on publicly available drafts and circulars. As Section 115BBF is currently marked Retained, always confirm its treatment with a qualified Chartered Accountant before filing or making compliance decisions.
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