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 Direct Tax Code 2025 (Income-tax Act, 2025), effective 1st April 2026. Status: Retained.
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.
Related Articles from the Tax Academy
chapter via deductions
Section 80RRB Scrapped in New Tax Code: Guide for Patent Royalties
Expert analysis on the removal of the Section 80RRB deduction for patent royalty income under the new Direct Tax Code 2025. Understand the impact on inventors and new tax compliance.
corporate compliance
Guide to Section 115BBF & Direct Tax Code 2025 on Patent Royalties
A professional compliance guide by senior tax advisors on the transition from Section 115BBF of the 1961 Act to the new Direct Tax Code 2025 for patent royalty taxation.
Frequently Asked Questions
What does Section 115BBF of the Income Tax Act 1961 deal with?
Section 115BBF (Tax on income from patent) Provides a concessional tax rate of 10% on royalty income derived from patents developed and registered in India.
What is the new section number for Section 115BBF under the Direct Tax Code 2025?
Section 115BBF of the ITA 1961 maps to Section 121 of the Direct Tax Code 2025 (Income-tax Act, 2025), effective from 1st April 2026.
What is the status of Section 115BBF under the new tax code?
Section 115BBF is marked as "Retained" with status "Active". Impact: Medium - Highly beneficial for pharma and tech innovators.
What are the key changes to Section 115BBF under DTC 2025?
R&D expenditure tracking strictly linked to ensure the patent was genuinely 'developed' in India.
Disclaimer: This page is for educational and reference purposes only. Section mappings are based on publicly available drafts and circulars. Always consult a qualified Chartered Accountant before filing or making compliance decisions under the Direct Tax Code 2025.
Need professional help on Section 115BBF?
Compare trusted providers — both offer DTC 2025-ready CA services.
*Affiliate links — we may earn a small commission at no extra cost to you. Disclosure.
Want to calculate tax on this section?