This discussion clarifies that no Tax Deducted at Source (TDS) is required on royalty payments made to the Government. The Government is not considered a seller for Tax Collected at Source (TCS) purposes in this context, meaning the payer is not obligated to collect TCS on such royalty payments.
07 May 2025
No tax is required to be deducted at source (TDS) on any sum payable to the Government. If you are making a royalty payment to the Government, you are not liable to deduct TDS on such payments. Government, when receiving royalty, is not acting as a seller in the context of TCS provisions, and there is no requirement for the payer to collect TCS on royalty payments made to the Government.