TDS on Softwares

In case of purchase of software, there are two possibilities, namely, either you are going for a ready made software that is available to the public at large, e.g. softwares like, Tally, MS Office, Windows, etc. As these are general purpose softwares and are not developed to meet needs of any specific organisation. in such case, there is no need to deduct tax at source.

However, when we go for a tailor-made software, that is designed specifically for the need of our own organisation, as for example any ERP or any such software to suit our needs and the vendor is actually developing a new one as per our requirement, then in such case, tax has to be deducted under section 194J.

Hope this is clear.

Regards,

CA. Amol G. Kabra

Hey...... on sale of software tds has to be deductde depending upon the fact as to how the receiver accounts the same as......... If he accounts under royalty or any service covered under 194 J tax has to be deducted.......... But lets consider the situation logically......... no one is going to just sell some software and leave....... They'll surely provide service and guidance on the same.... So its safer to deduct tds on software sales.......... Recently we suggested the same to one of our client.......Am Very sure yer........ 

Thanks Friends , for Your Valuable replies