TDS on Software Subscription

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Raviprasad (Querist)
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01 February 2011 Hi, i wanted to know whether TDS is deductable at the time of renewing the license of software, the term used in the invoice is "Subscription charges for the year". if yes, under which section? and why?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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01 February 2011 While renewing the license, you are paying an amount which can be said in the nature of use of copy right.
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It does not amount to any consultancy as the license which is being provided to you is capable itself in performing your task.
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More ever the phrase "Subscription Charges for the year" indicates that it's not a fee like consultant's charges.
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Fixed Duration of its use also makes it different from consultancy.
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you are getting any-time access to the software during its currency period as if it's your own thing.
Similar use of a consultant is not possible at all.
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I may conclude now, that as such you are getting a thing like object which is even though intangible, but more tangible than consultancy services, hence it should be deemed as purchase of an object for which no TDS is deductible.

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