We have a customized webbase software and maintained by a IT company. They recently developed some segment of that software and placed a bill Rs 70000 + IGT 18%. Now, whether we should deduct TDS U/S 194 C 2% or 194 J 10%?
Replies (3)
Quick Summary
Discussion on TDS rate for customized software development. Payments to IT company for developing or modifying software are treated as technical/professional services, so TDS u/s 194J @10% applies. Some proposals suggest reduction to 2% later, but current applicable rate is 10%.
TDS at 10% under 194J as payment for technical services.
The TDS rate is proposed to be reduced to 2% from 10% for payment towards technical services under 194J ( as in Budget 2020) Will become effective most likely from 1st June 2020 onwards.
CAclubindia
