675 : Circular No. 675, dated 3-1-1994

610. Whether person, who receives payment for film which has been produced, directed or scripted by him, would be entitled to deduction under section 80RR

1. Section 80RR of the Income-tax Act, 1961 provides that an individual resident in India, being an author, playwright, artist, musician, actor or sportsman (including an athlete) who derives income in exercise of his profession from the Government of a foreign State or any person not resident in India shall be entitled to a deduction from his income of (i) 50% of such income, or (ii) 75% of such income as is brought into India in accordance with the Foreign Exchange Regulation Act, 1973 and rules made thereunder, whichever is higher.

2. By Circular No. 3l, dated 25-10-1969 the Board clarified that photographers and TV cameramen can be regarded as artists for the purposes of section 80RR of the Act.  A question has been raised whether a person, who receives payment for a film which has been produced, directed or scripted by him, would be entitled to deduction under section 80RR of the Act.  The Board has examined the matter and is of the view that a script writer can be regarded as " playwright" and similarly "director" can be treated as an ‘artist’ for the purposes of section 80RR of the Act.  However, a producer would not be entitled to deduction under section 80RR of the Act, because he does not fall under any of the categories mentioned in the said section.

Circular : No. 675, dated 3-1-1994.