TDS on software license sale payment

This query is : Resolved

Kumar Gaurav (Querist)
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25 October 2010 There is now VAT and Service Tax both levid on license sale. Because of this client is deducting TDS on the payment. Which is an issue in practical scenario, can we have some tds exemption certificate to avoid tds deducted or any other way for the same.

Please tell me as with margin on 5% on license resale, 10% tds is hurting badly. Any suggestion is appreciated.

taxindiaconnect

taxindiaconnect (Expert)
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25 October 2010 In case of shink wrap software, there is no TDS applicable as decided by various courts.However you can apply to your TDS officer for exemption u/s 197(2) in form no. 13.

Kumar Gaurav

Kumar Gaurav (Querist)
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25 October 2010 I am traying to sell the license only.

Please guide me through any documentation which can tell clients not to deduct tax.

Also in case of form no 13 under which category should I apply for exemption.

Thanks,
Kumar

taxindiaconnect

taxindiaconnect (Expert)
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25 October 2010 You need to apply under professionals 194J. You need to show the issued certificate from IT department.

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