Tds should deduct ??

A Window software purchased by a customer worth rs. 49692/- (including service tax and vat), While making of payment towards this invoice should he deduct TDS as he received invoice with Service tax ????

TDS Should be deduct on total bill amount. i.e 49692/-

If the customer has purchased the Windows Software that means you must be a dealer for Microsoft. As per the lastest judgement by Delhi High Court in case of CIT v/s Dynamics Vertical Software India P Ltd TDS is not required to be deducted.

Agreed with Hemant TDS will be deducted on complete amount including Service Tax

@ Amitji - R u sure ???

TDS will not be deducted...........

I think both final user as well as the dealer are not required to deducts TDS as no provisions of Sec 194 are attracted.

The point is that Windows Software is operating program and which is essentials to run the computer and without which the computer cannot operate so as per the accounting principle the cost of the Windows package needs to capitalise with the Hardware computer. General perception is that you need not deduct TDS on Capitalised amount. You will always be liable to pay TDS irrespective of whether expenditure is claimed or not.

The case law I referred is from CA final case study. This case law was for the payment to Microsoft in case of royalty to non resident. You may ignore the case law which I referred originally for a while. I take my words back.

In that case it is right to deduct TDS under 194J as Royalty on whole of the Invoice Amount.

YES WHAT AMIT BAI SAID IS CORRECT

YES TDS DEDUCTION IS NOT REQUIRED

IF YOU PAY A BILL OF LODGING &  FOODING  YOU R DEDUCT TDS FROM THERE BILL