TDS

This query is : Resolved

Rohit (Querist)
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21 December 2010 My manager purchased a Tally software for which monthly payment would be made 150000 all time every year from TATA consultancy Ltd. Iam working in a spices company. Whether i deducted TDS on monthly payment of Rs 150000 every time or not. Tell me with reason. Please

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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22 December 2010 Specify the payment nature correctly

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
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27 July 2025 On your query about TDS on monthly payments of Rs. 1,50,000 to TATA Consultancy Ltd. for Tally software:

### What section applies?

* **Section 194J**: TDS is deducted on fees for professional services, technical services, royalty, and non-compete fees.
* Payments to software companies for software license or usage fees usually attract TDS under **Section 194J**.

### Is TDS applicable here?

* Since you are paying for Tally software license/subscription/service to TCS, **TDS is applicable under Section 194J**.
* The applicable rate is **10%** if TCS is a company.
* The payment is recurring (monthly Rs. 1,50,000), so TDS should be deducted **every month** at the time of payment or credit (whichever is earlier).

### Why?

* Tally software payment is considered as "technical services" or "professional fees" under 194J.
* TDS ensures tax collection at source on such service payments.

### What if TDS is not deducted?

* You (the payer) will be liable to pay interest and penalty under the Income Tax Act.
* The payee (TCS) will not get the credit of TDS deducted.

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**Summary:**

* Yes, you must deduct **10% TDS under section 194J on Rs. 1,50,000 every month** paid to TCS for Tally software.
* Deposit TDS with government before due date and issue TDS certificate.

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