tds on import of intangible asset
Querist : Anonymous
Is there any provision of deducting TDS on purchase of intangible capital asset from other country ?
If yes than , what is the provision if that TDS not deposited in time and what amt will be disallowed i.e capital expenditure or revenue ( depriciation/ ammortisation)
For more details follow the link -
https://www.caclubindia.com/forum/is-payment-for-import-of-software-liable-to-tds--8965.asp
Querist : Anonymous
Can i know what about TECHNICAL ASSISTANCE (SERVICE)
Is it copyright product or copyrighted one?
Querist : Anonymous
Can i know what about TECHNICAL ASSISTANCE (SERVICE)
Is it copyright product or copyrighted one?
---
### 1. **TDS on Import of Intangible Capital Asset (like software, patents, copyrights, trademarks, etc.):**
* **Purchase of intangible capital asset from a foreign vendor** is generally considered as **purchase of goods or capital asset**, not income.
* Therefore, **no TDS is deductible on purchase price** of such intangible assets under Indian Income Tax provisions.
* The amount paid is treated as **capital expenditure** and is eligible for **amortization or depreciation** as per Income Tax rules.
---
### 2. **TDS on Technical Assistance / Technical Services:**
* **Technical assistance fees or technical services** payments to non-residents are generally considered as **fees for technical services (FTS)**.
* Under Indian tax law, **TDS is deductible on FTS payments** to foreign entities under **Section 195**, subject to rates under the Income Tax Act or applicable Double Taxation Avoidance Agreement (DTAA).
* Whether technical assistance is a **copyrighted product** or **service** depends on the nature of the contract:
* If it is a **one-time transfer of copyright or product license**, it could be treated as a royalty (TDS applicable).
* If it is **ongoing services**, it is treated as FTS (TDS applicable).
---
### 3. **If TDS is not deducted or deposited on time:**
* The payer is **liable for interest and penalties** for late deduction or deposit under Sections 201(1A) and 271C.
* Also, the amount of TDS not deducted or deposited may be **disallowed as expense**, affecting taxable income.
---
### Summary Table:
| Payment Type | TDS Applicability | Tax Treatment |
| ---------------------------- | -------------------------- | ---------------------------------------------- |
| Purchase of intangible asset | No TDS | Capital expenditure, eligible for amortization |
| Technical Assistance Fees | Yes, TDS under Section 195 | Expense, taxable as income in India |
| Copyright/license fees | Yes, TDS under Section 195 | Income considered as Royalty |
---
If you want, I can help you draft specific tax provisions and circular references for each point. Would that help?
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