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TDS on software purchase from the vendor

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If we purchase any software from the vendor (resident), TDS will be applicable or not ?
Replies (5)
Quick Summary
Discussion on applicability of TDS on purchase of software from a resident vendor. Generally covered under Section 194J as professional/technical services, but exemption may apply as per CBDT Notification 21/2012 in specific cases like resale without modification and prior TDS deduction.

Yes. It is applicable
Yes, general TDS will applicabe on such purchase.

Furthermore, There is an exemption available as per below notification issued by CBDT:
Notification number 21/2012 dated 13.06.2012


No TDS u/s 194J on Payments for Software Purchase

As Per notification no. 21/2012 dated 13.06.2012 no deduction of tax shall be made on the following Payment by a person (hereafter referred to as the transferee) for the acquisition of software from another person, being a resident, (hereafter referred to as the transferor), where-

(i) The software is acquired in a subsequent transfer and the transferor has transferred the software without any modification,

(ii) Tax has been deducted-

(a) Under section 194J on payment for any previous transfer of such software; or

(b) Under section 195 on payment for any previous transfer of such software from a non-resident, and

(iii) The transferee obtains a declaration from the transferor that the tax has been deducted either under sub-clause (a) or (b) of clause (ii) along with the Permanent Account Number of the transferor.

 Yes,You can deduct tds u/s 194J @ 2% , In Techinal Services.

Tds on Software lince will be covered under profession.

194J as said by above members
For consultancy and professional fees it's OK but not on purchase.


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