The ₹3 lakh shelter is for residents only
There is a genuinely useful deduction for authors, and it is the thing NRIs most often assume they can use. Under Section 80QQB a resident author of qualifying books can deduct up to ₹3 lakh of royalty income, and a parallel deduction under Section 80RRB does the same for royalty on patents. But both carry a condition that is easy to miss: the person claiming them must be resident in India. So an NRI author simply does not qualify, and your Indian royalty is taxed in full, with no ₹3 lakh shelter to reduce it.
That single point changes the maths for a lot of NRI writers and creators, who budget as though the deduction applies. It does not, and the default new tax regime would remove most such deductions for everyone in any case, so there is no version of this where an NRI author gets the ₹3 lakh break. The starting position, then, is that the whole of your Indian royalty is on the table, and the only real reliefs are the treaty rate and getting the withholding right.
How the royalty is taxed and withheld
Your royalty from an Indian publisher or platform is Indian-source income, characterised as royalty under Section 9(1)(vi) where the payer is in India or the work is exploited here. Because you are a non-resident, the Indian payer must withhold TDS under Section 195, the section for payments to non-residents, and not the resident royalty section that applies to Indian authors. Getting the payer onto the right section matters, because the resident section carries a different rate and would be wrong for you.
Where relief comes in is the treaty. Most tax treaties cap the rate on royalties, often at 10 to 15 per cent on the gross, and you can claim the lower of the treaty rate and the domestic rate, supported by a tax residency certificate and Form 41, formerly Form 10F. A treaty can also re-characterise the income in some cases, so the exact position depends on your country. Under the Income-tax Act, 2025 the withholding section is renumbered to Section 393(2) from FY 2026-27, while the source rule stays at Section 9. A practising CA gets the publisher's withholding onto Section 195 at the treaty rate, files your return, and makes sure you are not taxed as if the resident author's deduction applied.