1) Login Using SSH in GNS 3 VM
2) Update repositories - apt-get update after entering root mode using sudo su
3) Download Phthon - apt-get install python
4) Download the keygen - wget http://www.ipvanquish.com/download/CiscoIOUKeygen3f.py
4) Give permission - chmod 0755 CiscoIOUKeygen3f.py
5) Execute it - python3 CiscoIOUKeygen3f.py
6) Note the license key.
7) Browse to cd /opt/GNS3/images/IOU
8) Create a new file - IOURC.txt
9) Paste the license key in the following format

[license]
localhost.localdomain = 73635fd3b0a13ad0;

10) In GNS3 - Preferences -> IOU -> Select the path / paste the key in the same format.