software dongle

we are buying a software from a dealer located in mumbai who imports the same from USA. we urged to deduct tds u/s 194j so he explained that he is providing us dongle and not soft copy so no tds required. please provide the clarity. thanks in advance.
Replies (5)
what is the Constitution of your company ? Are you proprietor Firm Pvt LTD and or tax audit assessee ? Then can be decided
sir pvt limited liable to tax audit
194J is for -
Fees for professional or technical services.

1. It is prudent for any company to deduct TDS u/s 194J @ 10% if the payment for purchase towards software is made during the year and the amount exceeds Rs. 30,000. 
2. However, in your case, you have mentioned as software and as well as a dongle. These are two different products which require different treatments. 
3. If the nature of the product is a software (exclusively) and forms a major part of the purchase then whatever the amount that you have paid towards purchases will be considered as "Royalty" and TDS u/s 194J @ 10% is to be deducted if the amount exceeds Rs. 30,000.  
4. On the other hands, if the same is in the nature of dongle which is a hardware product used as a part of a computer, will not be regarded as software. In this case, no TDS will be applicable as it will come under the sale of goods. 
5. Before making a decision make sure what is the exact nature of the product and make appropriate action according to it. 
Please correct me if the above solution has an alternative view. 

Plz check with your company Auditor as well as tax audit auditor. To avoid any qualification in Audit report.

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