TDS Deduction

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Raghavendra (Querist)
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31 January 2011 Dear All,

Query relats to TDS deduction.

Company has paid Rs.1,00,000-00 ( Service Tax of Rs. 10,300-00 extra) for software licence renewal, whether i have to deduct TDS on that? if, what rate, please can any one explain. please...

CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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31 January 2011 Yes...TDS @ 10 % will apply.

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CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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31 January 2011 I have presumed that this software is a customized software, especially as per your requirement.

If the above is not the case & the same software is a general software then TDS will not apply.

Raghavendra

Raghavendra (Querist)
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31 January 2011 Yes, its antivirus software, for that we have paid renewal of licence.

CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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31 January 2011 In the case of any software only the license is given for the use of the software. It has been clarified by the Supreme Court of India, in the case of TCS V State of Andhra Pradesh (2004) 271 ITR 401 (SC) that granting of such licenses for the use of software is in the nature of a payment for a copyright. In such a transaction, the primary object of the transaction and intention of the parties, is to avail of an article for use.

Therefore, no TDS liability arise in your case.

Sunil Kr. Sanganeria

Sunil Kr. Sanganeria (Expert)
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31 January 2011 TDS ia not applicable on renewal of Software licence

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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26 June 2012 This is a usage-based payment made by one party (the "licensee") to another (the "licensor") which is called 'royalty' and accordingly section 194J attracts.

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