Tds
This query is : Open
07 August 2016
Dear sir, A company purchased software as per its requirement so it has to deduct TDs u/s 194 J or not ?
07 August 2016
Finance Act 2012 has amended the definition of “royalty”. The amendment in section section 9 (1) (vi) now defines ‘royalty’ as any ‘right for use’ or ‘right to use’, a computer software (including granting of a license), irrespective of the medium through which such right is transferred. Hence purchase of software though dealer also would comes under the ambit of above definition.
Since section 194J provides for deduction of tax at source on payment made for royalty payment the payments towards purchase of computer (technically right to use computer software) will be liable to tax deduction at source under section 194J @ 10%.
However sale of computer software involves a channel i.e. from developer to distributor to dealer to end-user. To avoid tax deduction at several levels, CBDT issued the Notification 21/2012 dated July 1, 2012
As per the said notification, the tax deduction at source (‘TDS’) will not apply on acquisition of software from another person, being a resident ,
if the software is acquired in a subsequent transfer and
the transferor has transferred the software without modification and
TDS has been deducted under section 194J or 195 of the Income tax Act, 1961 (‘the Act’) on payment of previous transfer of software
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
- TDS CREDIT MISMATCHING
- Buy back of shares u/s69
- Tax Audit Applicability – Newly Formed Partnership Firm with Profit Below 6%/8%
- RATE AND HSN CODE
- Carriage Road Act, 2007 read with Carriage by Road Rules, 2011
- TODAY INCOME TAX SITE IS NOT WORKING ANY OFFICIAL EXTENSION
- Sale of property held jointly with a non resident Indian
- ADDITION OF CHALLAN IN TDS RETURN FORM 140
- Can we choose not to report losses in ITR3 if they cannot be carried forward?
- Taxability of Partnership firm for FY 2025-26
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
- LLP audit under companies act
- Experienced CA recommendation from Kolkata for FNO return filing
- Interest Reporting in Form 168
- Sales of goods of amount Rs77 lakhs to a party
- Tax Demand of ₹4,650 for AY 2026-27
- Concept of Vendor and customner reconciliation
- Mistake in e-invoice identified after 24 hours
- EXPORT PAYMENT
- NRI ITR2 account in 2025-26.
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
