4 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II--SEC. 3(i)]
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
New Delhi, the 31st March, 2017
G.S.R. 318(E).--In exercise of the powers conferred by sub-section (3) of section 115BBF, read with section
295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules
further to amend the Income-tax Rules, 1962, namely:--
1. (1) These rules may be called the Income-tax (5th Amendment) Rules, 2017.
(2) They shall come into force on the1st day of April, 2017.
2. In the Income-tax Rules, 1962 (hereafter referred to as the principal rules), after rule 5F, the following rule shall
be inserted, namely:-
"5G. Option form for taxation of income from patent under section 115BBF.-
(1) For the purposes of exercising the option for taxation of income by way of royalty in respect of a patent
developed and registered in India, by an eligible assesse undersection 115BBF, the eligible assessee shall furnish
Form No. 3CFA duly verified in the manner indicated therein, and the same shall be furnished by the eligible
assessee in the following manner, namely:-
(i) electronically under digital signature; or
(ii) electronically through electronic verification code.
(2) The form referred in sub-rule (1) shall be complete in all respects and furnished on or before the due date
specified in Explanation 2 below sub-section (1) of section 139 for furnishing the return of income for the
relevant assessment year, in case the option is exercised for that assessment year.
(3) The Director General of Income-tax (Systems) shall specify the procedures, formats and standards for the
purposes for ensuring secure capture and transmission of data and shall also be responsible for evolving and
implementing appropriate security, archival and retrieval policies in relation to furnishing and verification of the
Form referred in sub-rule (1)."
3. In the principal rules, in Appendix II, after `Form No. 3CF-III', the following Form shall be inserted, namely:-
Form No. 3CFA
(See subsection (3) of section 115BBF
Read with rule 5G)
Form for Opting for taxation of income by way of royalty in respect of Patent
(a) Full name of the assessee:
(b) Permanent Account Number:
(c) Address of the assessee:
(d) Nature of business or activities of the assessee:
2. Whether the option for offering the income by way of royalty in respect of a patent as per section 115BBF is to be
exercised for the assessment year? Yes/No
(i) if yes, following details be provided,
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(1) previous year ended:
(2) assessment year:
(3) date of furnishing of return of income for the assessment year (if filed already):
3. Whether the income by way of royalty in respect of the patent is not offered for taxation as per the section115BBF
for any of the five assessment years succeeding the assessment year in which the option for taxation of income by
way of royalty under section 115BBF is validly exercised. Yes/No
(i) If yes, following details be provided-
(a) Previous year ended on which the option for taxation of income by way of royalty under
section 115BBF is first validly exercised:
(b) Assessment year ended on which the the option for taxation of income by way of royalty
under section 115BBF is first validly exercised*:
(c) date of furnishing of return of income for the assessment year mentioned in (b) above:
4. **Eligible Patent
Sl. No Particulars in respect of patent Remarks
A. Patent Details
(a) Patent Number granted under the Patents Act, 1970.
(b) Date of grant of patent under the Patents Act, 1970.
(c) Description of the patent developed and registered in India containing the invention,
patent article and patent process as detailed out in section 2 of the Patents Act.
(d) Whether the patent is granted to single persons:
Name of the patentee being the true and first inventor as entered in patent register.
Name of the patentees of the patent (patentee being the true and first inventors as entered
in patent register).
B. Royalty Income from eligible patent
(a) Amount of royalty income from eligible patent for the previous year.
(b) Nature of royalty income derived from the eligible patent for the previous year as
referred to in clause (h) of Explanation to Section 115BBF.
(i) transfer of all or any rights (including the granting of a license) in respect of
(ii) imparting of any information concerning the working of, or the use of , a
(iii) Use of any patent;
(iv) rendering of any services in connection with the activities referred to in sub-
clause (i) to (ii)
Expenditure incurred on eligible patent
(a) Total expenditure incurred on the patent asseseee for any invention in respect of which
patent is granted under the patents Act, 1970.
(b) Expenditure incurred in India by the eligible asseseee for any invention in respect of
which patent is granted under the patents Act, 1970.
6 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II--SEC. 3(i)]
(c) Expenditure incurred outside India by the eligible asseseee for any invention in respect
of which patent is granted under the patents Act, 1970. Yes/ No
(d) Whether the expenditure incurred in (b) above is seventy five per cent. or more than the
expenditure incurred under (a) above?
***I declare that to the best of my knowledge an belief, the information furnished herein is correct and truly stated.
* Details for the relevant assessment year or first of the relevant assessment years, as the case may be, to be
** Particulars of each eligible patent should be reported separately along with royalty income and expenditure
*** The form should be furnished and verified by the person authorised to sign the return of income under section
[Notification No. 25 /2017/F. No. 370142/1/2017TPL]
PITAMBER DAS, Director (Tax Policy And Legislation)
Note: The principal rules were published in the Gazette of India vide notification No. S.O. 969(E), dated the 26th March,
1962 and were last amended vide notification number S.O. 1006(E), dated the 30th March, 2017.
Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064
ALOK by ALOK KUMAR
and Published by the Controller of Publications, Delhi-110054. Digitally signed
KUMAR Date: 2017.04.03