Payment for software outside india

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Querist : Anonymous

Querist : Anonymous (Querist)

05 June 2013 Our Client has purchased a software from a foreign company to sell the software in India . what is the nature of payment to foreign company. does our client needs to deduct TDS under DTAA ?

Thanks in advance

suneel

suneel (Expert)
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05 June 2013 Please check DTAA with that country.

Section 194J provides for deduction of tax at source on payment of professional fees, technical fees, directors remuneration and royalty payments
Hence payments towards right to use computer software will be liable to tax deduction at source under section 194J @ 10%
If foreign company holds PAN TDS @ 10% if not 20%.

But however please check Notification 21/2012 Dated July 1, 2012. Before deducting TDS.

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Querist : Anonymous

Querist : Anonymous (Querist)

06 June 2013 The Amount Payable for Software, will it not be considered as Royalty Income ?