Amount paid on purchase of dynamic software
This query is : Resolved
18 March 2017
Our company purchased dynamic software of Rs.6,25,000.00 and Dynamic software company charged service tax on it, so please guide us dynamic software purchased by our company is capital expendiure or revenue in nature? And if
1) Capital in nature - What is the rate of depreciation 60% or 25% and require to deduct TDS on such amount or not? Or if
2) Revenue in nature - Under which section require to deduct TDS?
1) Capital in nature - What is the rate of depreciation 60% or 25% and require to deduct TDS on such amount or not? Or if
2) Revenue in nature - Under which section require to deduct TDS?
18 March 2017
As per provisions of income tax act, payment made towards software purchase is treated as royalty and allowed as REVENUE expenditure. Applicable Rate of TDS is 10%
18 March 2017
Thank you Shubhanshu for reply.
Can you please provide me more detail about this at where i can refer full provision regarding this?
Can you please provide me more detail about this at where i can refer full provision regarding this?
18 March 2017
And What about the implementation charges paid for this software?
18 March 2017
For learning more about tds on software purchase refer link given below
http://taxguru.in/income-tax/treatment-amount-paid-purchase-software-income-tax-act-1961.html
Once main expense in revenue in nature, expenses incidental to main expense are also treated as revenue in nature
http://taxguru.in/income-tax/treatment-amount-paid-purchase-software-income-tax-act-1961.html
Once main expense in revenue in nature, expenses incidental to main expense are also treated as revenue in nature
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