Question 1

What is the statutory timeline for trademark registration in India?

Accepted Answer

Under the Trade Marks Act 1999, an application is examined within 30 working days of filing (Rule 36, Trade Marks Rules 2017). If accepted, it is advertised in the Trade Marks Journal for 4 months for opposition under Section 21. Registration is typically completed within 18-24 months absent opposition. A registered mark is valid for 10 years from the filing date and renewable indefinitely under Section 25.

Question 2

How are royalties received from IP licensing taxed under ITA 2025?

Accepted Answer

For Tax Year 2026-27 under ITA 2025, royalty income is taxable as business income or income from other sources depending on whether the IP is held as a business asset. Non-residents receiving royalties from India are subject to withholding at 10% under Section 393 of ITA 2025 (corresponding to Section 194J of ITA 1961), subject to lower treaty rates under Section 159/160 of ITA 2025 (Section 90 of ITA 1961). For resident authors, a deduction under Section 80QQB of ITA 1961 is available on royalties up to Rs 3 lakh per assessment year.

Question 3

What FEMA compliances apply when a foreign entity licenses IP to an Indian company?

Accepted Answer

Royalty payments by an Indian entity to a foreign licensor are current account transactions permissible under Schedule III of the Foreign Exchange Management (Current Account Transactions) Rules 2000. The Indian entity must file Form 15CA/15CB under Section 195 of ITA 1961 (Section 393, ITA 2025) before remittance and report the transaction in the Annual Return on Foreign Liabilities and Assets (FLA) as required under AP (DIR Series) Circulars issued under FEMA 1999.

Question 4

Can IP be transferred to an Indian company as a non-cash equity contribution by a non-resident?

Accepted Answer

Yes. Transfer of IP as a non-cash contribution to equity in an Indian company by a non-resident is permitted under the FEM (Non-Debt Instruments) Rules 2019. The IP must be independently valued and the valuation certified by a SEBI-registered merchant banker or chartered accountant. Shares issued against such IP must comply with the sectoral cap and pricing guidelines under Rule 21 of FEM NDI Rules 2019, and the transaction must be reported in Form FC-GPR within 30 days of allotment.

Question 5

Is purchased IP amortisable as a tax deduction and at what rate?

Accepted Answer

Under ITA 2025 (and Section 32 of ITA 1961), intangible assets including patents, trademarks, know-how, and copyrights qualify for depreciation at 25% on the written-down value method as part of the intangibles block of assets. For internally generated IP, in-house R&D expenditure approved by the prescribed authority qualifies for a 100% deduction under Section 35 of ITA 1961 (retained in ITA 2025), subject to compliance with Rule 6 of the Income Tax Rules 1962 governing approval of in-house research facilities.

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Trademark Registration

FEMA & RBI Compliance

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