Abstract

A patent box regime is a tax incentive structure that offers advantageous tax rates on income from patents and specific forms of intellectual property (IP) in order to promote R&D and the commercialization of IP. Businesses can take advantage of lower tax rates on profits from the use of eligible patents, trademarks, copyrights, and other innovations under this scheme. The objective is to encourage innovation, support domestic R&D, and stop IP assets from moving to countries with lower tax rates. By providing a lower tax rate on income from patents, India's patent box scheme is a tax incentive designed to promote innovation and R&D domestically. Indian-resident patent holders are entitled to a 10% tax rate reduction on worldwide revenue derived from the use of patents created and registered in India under Section 115BBF of the revenue Tax Act, which was added in the Finance Act of 2016. This clause aims to boost domestic R&D, promote IP retention in India, and increase India's competitiveness as an innovative jurisdiction. India's patent box law and its function in offering advantageous tax breaks to inventors and intellectual property (IP) owners are the subjects of this study. The government aims to boost India's competitiveness in high-tech businesses globally and foster an environment that encourages research and development (R&D) by providing a 10% tax rate on income from patents that are filed and produced in India.

Keywords