Chapter VIII - Deductions to be Made in Computing Total Income
Section 151
Section 151: deduction for royalty income of authors
Section 151 gives a resident individual author a deduction on qualifying income from a literary, artistic or scientific book, whether from a lump-sum copyright assignment or royalty/copyright fees. Section 151(8)(b) excludes text-books for schools and the other listed types of publication; it does not state a blanket exclusion for every educational book. An individual taxed under the default new regime in Section 202(1) cannot claim this Chapter VIII deduction.
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Need advice on Section 151?
This article is for general information. Refer to the Income-tax Act, 2025 as amended by the Finance Act, 2026 and the Taxation and Other Laws (Amendment) Act, 2026 for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(1) Where, in the case of an individual, being an author resident in India, the gross total income includes any income, derived by him in the exercise of his profession, on account of any lump sum consideration for the assignment or grant of any of his interests in the copyright of any book being a work of literary, artistic or scientific nature, or of royalty or copyright fees (whether receivable in lump sum or otherwise) in respect of such book, there shall, as per and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such income, computed in the manner specified in sub-section (2).
(2) The deduction under this section shall be equal to the whole of such income referred to in sub-section (1), or an amount of ₹ 300000, whichever is less.
(3) Where the income by way of such royalty or the copyright fee is not a lump sum consideration in lieu of all rights of the assessee in the book, so much of the income, before allowing expenses attributable to such income, as is in excess of 15% of the value of such books sold during the tax year shall be ignored for the purposes of deduction under this section.
(4) In respect of any income earned from any source outside India, so much of the income shall be taken into account for the purpose of this section as is brought into India by, or on behalf of, the assessee in convertible foreign exchange within six months from the end of the tax year in which such income is earned or within such further period as the competent authority may allow in this behalf.
(5) Deduction under this section shall not be allowed unless the assessee furnishes a certificate in such form and manner, as may be prescribed, duly verified by any person responsible for making such payment to the assessee as referred to in sub-section (1), along with the return of income, setting forth such particulars as may be prescribed.
(6) Deduction under this section shall not be allowed in respect of any income earned from any source outside India, unless the assessee furnishes a certificate, in the prescribed form from the prescribed authority, along with the return of income in the prescribed manner.
(7) Where a deduction for any tax year has been claimed and allowed in respect of any income referred to in this section, no deduction in respect of such income shall be allowed under any other provision of this Act in any tax year.
(8) For the purposes of this section,— (a) “author” includes a joint author; (b) “books” shall not include brochures, commentaries, diaries, guides, journals, magazines, newspapers, pamphlets, text-books for schools, tracts and other publications of similar nature, by whatever name called; (c) “competent authority” means the Reserve Bank of India or such other authority as is authorised under any law in force for regulating payments and dealings in foreign exchange; (d) “lump sum”, in regard to royalties or copyright fees, includes an advance payment on account of such royalties or copyright fees which is not returnable.
Introduction
A resident individual author earning eligible copyright or royalty income from a qualifying literary, artistic or scientific book may deduct up to ₹3 lakh. Textbooks and other excluded publications, royalty valuation, foreign remittance and required certificates affect the claim.
Key takeaways
Qualifying author royalty
A resident individual author may deduct qualifying copyright-assignment, royalty or copyright-fee income from a literary, artistic or scientific book other than the excluded publications.
Ceiling and evidence
The deduction is limited to that income or ₹3,00,000, whichever is lower, and the prescribed payment certificate is required with the return.
What qualifies
The deduction applies to a resident individual author whose gross total income includes income earned in the exercise of their profession, from a lump-sum consideration for assigning or granting an interest in the copyright of a book (literary, artistic or scientific work), or from royalty/copyright fees (lump sum or otherwise) on such a book.
How much can be deducted
The deduction equals the whole of the qualifying income, or ₹3,00,000, whichever is less.
Where the royalty is not a lump-sum consideration for all the author's rights in the book, any portion of the income (before expenses) that exceeds 15% of the value of copies of the book sold during the year is ignored for this deduction.
For income earned from a source outside India, only the amount actually brought into India in convertible foreign exchange within six months of the end of the tax year (or a further period the competent authority allows) counts.
Conditions and definitions
- A prescribed certificate must be furnished with the return of income; for foreign-sourced income, an additional certificate from the prescribed authority is required.
- Once claimed under this section, the same income cannot be deducted again under any other provision.
- "Author" includes a joint author.
- "Books" excludes brochures, commentaries, diaries, guides, journals, magazines, newspapers, pamphlets, text-books for schools, tracts and similar publications. A publication should be assessed against this full statutory definition rather than assumed eligible merely because it is not used in a school.
- "Lump sum" includes a non-returnable advance payment of royalty or copyright fees.
Step-by-step flow for applying Section 151
- 1
Is the assessee an individual author (including a joint author) resident in India?
- No: No deduction under Section 151.
- Yes: Go to the next step.
- 2
Is the income a lump sum for copyright, or royalty or copyright fees, on a book of literary, artistic or scientific nature, earned in the exercise of the profession?
"Books" excludes brochures, commentaries, diaries, guides, journals, magazines, newspapers, pamphlets, text-books for schools, tracts and similar publications.
- No: No deduction under Section 151.
- Yes: Go to the next step.
- 3
Is the income a lump sum in lieu of all rights in the book?
- Yes: The 15% limit in Section 151(3) does not apply.
- No: Ignore the part of the income (before expenses) that exceeds 15% of the value of the books sold during the tax year.
- 4
Is any income from a source outside India?
- Yes: Count only the amount brought into India in convertible foreign exchange within six months from the end of the tax year (or further period allowed by the competent authority), and obtain the prescribed certificate for foreign income.
- No: Go to the next step.
- 5
Compute the deduction and file the certificate
Deduction is the eligible income or ₹3,00,000, whichever is less. The prescribed certificate verified by the payer must be furnished with the return. Income deducted here cannot be deducted again under any other provision.
Practical checklist
Do
- Document authorship, copyright agreement, book category and royalty computation.
- For foreign income, track convertible-foreign-exchange receipt and retain the prescribed payer or authority certificate.
Avoid
- Do not treat a school textbook or another excluded publication as qualifying merely because it is a book.
- Do not claim non-lump-sum royalty above the statutory 15% of book-sales value for this deduction.
Illustrative example
Worked example: royalty restricted by the 15% rule
Hypothetical facts (illustration only, not a real taxpayer): Dr. Iyer, a resident author, receives royalty of ₹3,20,000 during the tax year on a scientific book (not a school text-book). The royalty is not a lump sum for all her rights in the book. The value of copies of the book sold during the tax year is ₹16,00,000. All the royalty is from Indian sources and she holds the payer's certificate.
15% test under Section 151(3)
15% of ₹16,00,000 = ₹2,40,000. The royalty in excess of this, ₹3,20,000 - ₹2,40,000 = ₹80,000, is ignored for the deduction.
Eligible income
₹2,40,000.
Cap under Section 151(2)
Deduction is the lower of ₹2,40,000 and ₹3,00,000 = ₹2,40,000.
Outcome
- Section 151 deduction: ₹2,40,000.
- The full royalty of ₹3,20,000 remains in gross total income; only ₹2,40,000 is deducted.
- If the same income had been received as a lump sum for all her rights in the book, the 15% test would not apply and the deduction would be the lower of the income and ₹3,00,000.
Glossary
- Lump-sum consideration
- A payment for assignment or grant of copyright interest, subject to the section's definition.
- Royalty
- Book-related income from the author's copyright rights, subject to the statutory calculation.
Frequently asked questions
What is the maximum deduction under Section 151?
₹3,00,000, or the whole of the qualifying royalty/lump-sum income from the book, whichever is less.
Does this apply to authors of school text-books?
No. Section 151(8)(b) expressly excludes text-books for schools, along with brochures, journals, newspapers and other listed or similar publications. For other educational books, the complete statutory definition and the remaining conditions must be checked.
Can a non-resident author claim this deduction?
No - the section is limited to a resident individual author.
Is there a cap when the royalty isn't a one-time lump sum?
Yes - where the payment is ongoing royalty rather than a full lump-sum buyout, the portion of income exceeding 15% of the value of books sold during the year is excluded from the deduction.
Does the 15% of book sales limit apply to a lump-sum buyout of all rights?
No. Section 151(3) applies only where the royalty or copyright fee is not a lump-sum consideration in lieu of all the author's rights in the book. Section 151(8)(d) treats a non-returnable advance on royalties as a "lump sum", but the 15% limit is lifted only where the consideration is in lieu of all the author's rights in the book.
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Check your Section 151 author royalty deduction with our tax teamLast updated 10 October 2026