Needs to account the TDS either 2% or 10%

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This discussion seeks clarification on whether Tally software maintenance services should be classified as professional or technical services for TDS purposes. The consensus leans towards it being a technical service, with a recommendation to deduct TDS at 2% under Section 194C of the Income Tax Act, rather than 10% which is typically for professional services.

Marimuthu

Marimuthu (Querist)
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18 September 2023 Dear Experts,
1 The company is availing the service for tally software maintenance service from the service provider.
2 The query :
Whether this service can be classified as either professional services or technical services.
Whether the company needs to account the TDS either 2% or 10%
How can we differentiate the technical service from the professional service in this case
3 pls clarify

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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18 September 2023 This is professional service as it's software service.
Technical service is repair of machinery.

RAJA P M

RAJA P M (Expert)
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18 September 2023 2% TDS applicable for this kind of service. The Software seller/service is intermediary of business...

Marimuthu

Marimuthu (Querist)
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19 September 2023 Thank you both of you Sirs,

please direct me whether it has to be deducted wiht either at 2% or 10%.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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19 September 2023 The deductor must deduct TDS on AMC Charges (Annual Maintenance Charges) at the rate of 1% or 2% (as applicable) under Section 194C of the Income Tax Act,

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