IP Assignment and Licensing in India:
Unlock the Value of Your Intellectual Property

Each type of IP has its own statute, its own writing rule and its own register. A deed that binds the parties can still fail as proof of title in court if nobody recorded it.

Sources: Trade Marks Act, 1999, sections 38, 39 and 45; Copyright Act, 1957, sections 19 and 30; Patents Act, 1970, sections 68 and 69. IP India trade mark fees, copyright and patent fee schedules. Read 26 Oct 2026.

For a trade mark assigned without the goodwill of the business, section 42 adds a step. The assignee must apply to the Registrar for directions on advertising the assignment within six months, extendable by three months. Until then, the assignment does not take effect.

The Registrar ordinarily disposes of a TM-P request within three months (rule 76). For patents, either party to the transaction can apply on Form 16 (section 69(2)). We file the recording as soon as the stamped deed is back.

Clauses we always cover

• Each IP item, with its registration or application number.
• The rights moved or licensed, the field of use and exclusivity.
• Term and territory, in words. For copyright, section 19 defaults to five years and India.
• The consideration or royalty: the base, the rate and the payment dates.
• For a trade mark, whether it moves with or without the goodwill of the business.
• Who bears Indian withholding tax, and whether payments are grossed up.
• Quality control over the licensee's use of a trade mark.
• Who files TM-P, TM-U, Form 16 or Form XV, and by when.

Sources: Patents Act, 1970, sections 68 and 69. Trade Marks Act, 1999, section 45. Income Tax Act, 2025, section 159. CBDT transition FAQs. Read 26 Oct 2026.

Stamp duty

Stamp duty on an IP assignment or licence is a state levy. The rate depends on the state where the deed is signed or first brought into India, and on how the instrument is classed. We confirm the state schedule before signing and stamp the deed before it goes to any registry.

Where the price needs support, we prepare the valuation report as part of the engagement.

Section 207 of the Income Tax Act, 2025 taxes royalty paid by an Indian concern to a non resident or foreign company at 20 percent. The tax applies to the gross amount, with no deduction for expenses. The agreement must meet the section's conditions on government approval or industrial policy.

For a foreign company, surcharge is 2 percent where the payments subject to deduction exceed ₹1 crore, and 5 percent above ₹10 crore. These rates come from Part II of the First Schedule to the Finance Act, 2026. Health and education cess applies on top.

A tax treaty can lower the rate. Section 159(4) applies the Act only to the extent it is more beneficial, so the payee takes the lower treaty rate. To claim it, the payee needs a tax residency certificate and the prescribed information, filed as Form 41 (section 159(8)).

Sources: Income Tax Department, DTAA texts with the USA, UK, Singapore and UAE. Income Tax Act, 2025, sections 159 and 207. Read 26 Oct 2026.

Worked example

Assume an Indian subsidiary pays its US parent a royalty of ₹50,00,000 in tax year 2026-27. It makes no other payment to the parent that year. The parent holds a valid TRC and has filed Form 41.

• At the treaty rate of 15 percent, TDS is ₹7,50,000 and the parent receives ₹42,50,000.
• Without the treaty claim, TDS at 20 percent under section 207 is ₹10,00,000, plus cess.
• No surcharge applies in either case, because the payments do not exceed ₹1 crore.

The Indian payer deducts under section 393 and files Form 145, backed by a chartered accountant's Form 146, before the money leaves India. Our guides on TDS on payments to non residents and Forms 145 and 146 cover the filing steps.

GST on the royalty

A royalty paid to a licensor outside India is an import of services. The Indian licensee pays GST under reverse charge, under entry 1 of Notification No. 10/2017 Integrated Tax (Rate). Our guide on reverse charge on services from a foreign parent explains the credit and the return.

No. A royalty or licence fee is a current account transaction. Royalty, trade mark and franchise payments do not appear in Schedules I to III of the Foreign Exchange Management (Current Account Transactions) Rules, 2000. The AD bank remits them without RBI or government approval.

The bank still needs the papers. We prepare the agreement, the invoice, Forms 145 and 146, and the purpose code. RBI's Form A2 purpose code list uses S0902 for payments for the use, through licensing arrangements, of produced originals and protected rights. It uses S0901 for franchise services.

Pick the code that matches the agreement and the tax treatment. Our guide on purpose codes for foreign remittances lists the related codes. The India repatriation planner compares royalty with dividends and service fees as ways to pay a parent.

1. Licensing a brand the parent has not filed in India. Fix: file TM-A in the parent's name before the licence starts, and record the subsidiary as registered user once the mark registers.
2. Leaving the deed unrecorded. Fix: file TM-P or Form 16 soon after signing. Sections 45(2) and 69(5) keep unrecorded documents out of evidence of title.
3. A copyright assignment with no term or territory. Fix: state both, or section 19 limits it to five years and to India.
4. Remitting at the treaty rate without a TRC and Form 41. Fix: collect both before the first payment, or deduct at the section 207 rate.
5. A royalty rate with no benchmark. Fix: support the rate before the first invoice, because the accountant's report will cover it.
6. A patent licence agreed by email. Fix: sign a document with all the terms, as section 68 requires.
7. The wrong purpose code. Fix: use S0902 for licence royalties and S0901 for franchise fees, matching the agreement.