Tds on ms office standard licence

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Gireesh Hegde (Querist)
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17 December 2012 Hi,

Can anybody confirms the applicability of TDS on MS Office Standard Open Licence.

The Vendor Charged Service Tax & VAT both on the above description and the value of the same is 5 lakh.

Thanks.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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17 December 2012 In my view TDS not required to be deducted since it is an Off the Shelf Software. It is a simple transaction of sale.
Views of other experts awaited.

Gireesh Hegde

Gireesh Hegde (Querist)
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17 December 2012 Hi Sanjay,

Whether below definition applicable for this?

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.

Section 194J provides for deduction of tax at source on payment of professional fees, technical fees, directors remuneration and royalty payments

Hence payments towards right to use computer software will be liable to tax deduction at source under section 194J @ 10%

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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17 December 2012 In case you are buying license this rule will apply and TDS will have to be deducted u/s 194J.

CA Hiren Thakkar

CA Hiren Thakkar (Expert)
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17 December 2012 Agreed with above opinion.....
Purchase of Licenced version of any software covered by sec 194J, hence TDS will have to deducted provided other criteria of 194J are fulfilled...

Rgds,
CA Hiren Thakkar

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