Royalty or License Fees
This query is : Resolved
Quick Summary
14 July 2020
Hi,
In case of copyrighted software product , distributors/resellers pay a fixed amount/fixed % to the copyright owner for every sale. In this case fixed amount/fixed % on every sale will be in nature of royalty or sales? Also there can be multiple distributors for same copyrighted software product.
Also if royalty/sales can this fall under presumptive scheme?
Regards,
In case of copyrighted software product , distributors/resellers pay a fixed amount/fixed % to the copyright owner for every sale. In this case fixed amount/fixed % on every sale will be in nature of royalty or sales? Also there can be multiple distributors for same copyrighted software product.
Also if royalty/sales can this fall under presumptive scheme?
Regards,
14 July 2020
It will be in the nature of royalty. It will not fall under presumptive scheme.
14 July 2020
Thanks for the opinion
What if copyright owner sells directly to end users ? Then it will be license fees? How will that be taxed?
What if copyright owner sells directly to end users ? Then it will be license fees? How will that be taxed?
14 July 2020
Yes, if software is sold directly it will be treated as sale.
14 July 2020
Will the same apply if same is sold through a distributor or reseller? i.e Copyright owner to distributor/reseller and reseller to end user. Will this be sales?
14 July 2020
Yes this will be sales.
14 July 2020
If you are directly selling to user and charging the licence fees then you can show it as a sale and report u/s 44AD.
However if you are receiving royalty/commission from your distributor on every sale then it cannot be presumptive income. Books of Accounts have to be maintained.
However if you are receiving royalty/commission from your distributor on every sale then it cannot be presumptive income. Books of Accounts have to be maintained.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- CAPITAL GAIN BASE ON NOTIFICATION
- Form 140 tds
- Taxable or Tax exempt
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- ADVANCE PAYMENT OF ADVOCATE
- NRI starting business in India
- TDS Deducted AY-2013-14 Not Reflected in 26as
- Demand Outstanding AY 2013-14 TDS Deducted not shown in 26as
- GST not cancelled by tenant
- Eway bill generation from place other than registeted
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- STATUTORY AUDIT OF A SMALL PRIVATE COMPANY INCORPORATED ON 28.03.2025
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
- LLP audit under companies act
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
