Applicability of IT TDS on purchase of Capital goods

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N. A

JOB

50 Points Posted on 02 October 2023

Dear Sir,

Recently our company has purchased Computer Firewalls ( Hard Ware) from a vendor for Rs.5,90,000/- (inl.of GST)

1) In Agreement it was clearly mentioned that the value of Computer Firewalls ( Hard Ware) is Rs. 5,90,000 /- inclusive of value of supply of Firewalls and installation, transport,insurance and applicable taxes if any..

2) Tax Invoice shows value of Fire walls 2 Q Rs.5,00,000/-

GST @ 18% Rs.90,000/-.

Total Rs.5,90,000/-

In this regard please guide me

I) whether I need to deduct IT TDS under 194J or 194C and GST TDS ?

II) what would be the IT TDS & GST TDS if it is for software purchase ?

III) If installation charges are separately shown in the invoice i.e.,

Value of Materials Rs.4,50,000/-

Installation charges Rs.50,000/-

GST @ 18% RS.90,000/-

Total Bill Rs.5,90,000/-

on amount TDS is to be deducted whether on total bill value or only on installation charges.

I Hope i will get the professional advice very soon... thanks in advance

Replies (5)

Quick Summary

This discussion seeks clarification on deducting Tax Deducted at Source (TDS) for capital goods purchases, specifically computer firewalls. The user is asking whether to apply IT TDS under sections 194J or 194C, and also about GST TDS, particularly when installation charges are included or separate on the invoice. Guidance is also requested for software purchases and consultancy charges related to software acquisition.

sabyasachi mukherjee

Profession

19978 Points Posted on 03 October 2023

If the bill is mentioned as provided consultancy charges for purchase of software. Sec 194j is applicable.

N. A

JOB

50 Points Posted on 03 October 2023

It is not consultancy charges...only purchase of Hard Ware / Soft Ware.

Please give clarifications on above mentioned scenarios so that it could be useful to many others out there.

sabyasachi mukherjee

Profession

19978 Points Posted on 05 October 2023

So if it is consultancy charges, then 194J.

N. A

JOB

50 Points Posted on 05 October 2023

Sir,

It is requested to please read question and replies above once again and give answer responsibly.. don't give vague answers if you don't know.

Aashok Kumar Sharma

Finance/Compliance Consultant

75672 Points Posted on 07 November 2026

Hardware purchase is goods. No TDS, except 194Q:

• Buying firewalls or computer hardware (goods) isn't a contract for work (194C), professional service (194J), or royalty. No TDS on the purchase price.

• Sec 194Q (0.1%) applies only if your turnover exceeded Rs 10 crore in the preceding FY and purchases from that vendor exceed Rs 50 lakh in the year (on the amount above Rs 50 lakh).

• If the invoice includes installation or configuration services or a software licence or subscripttion (e.g. annual firewall licence or security subscripttion), that component may attract 194J (2% for technical services or 10% for royalty, depending on nature), or nothing if it's a resale of standard software (Notf 21/2012 conditions). Ask the vendor to split the invoice.

• Capital asset: computers and peripherals get 40% depreciation.