TDS
This query is : Resolved
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
22 December 2010
Specify the payment nature correctly
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.
---
**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.
### 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.
---
**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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