Tds rate and section on software purchase

no TDS on software purchase.

In the context of a software purchase, TDS is a form of tax that is applied to certain types of transactions, including the sale of goods or services, in India.

When a person (referred to as the "deductor") makes a payment to another person (the "deductee"), the deductee may be liable to pay taxes on that income. To ensure that the taxes are paid, the government requires that the deductor deduct a certain percentage of the payment as TDS and deposit it with the government on behalf of the deductee.

The software purchase specifically, TDS is applicable on the payment made to the software vendor if the payment is made to resident vendor and the vendor is providing services (and not goods) and amount is more than Rs. 30,000.

The TDS rate for software purchase is usually 2% for the services provided by the vendor. However, the rate may be different for different types of services and for different categories of taxpayers.

Additionally, for TDS to be applied, the software vendor has to be registered with the government and having PAN, and should also provide TDS certificate (Form 16A) as per the Indian tax laws.

Hello, 

Please can someone clarify if TDS is applicable on the below two scenario.

(a) Accounting Software License purchased by ABC from a Resident Indian Company (IRN), is TDS deductible @ 2% u/s 194(J)?

(b) The License acquired from the Resident Company (IRN) is just a transfer of right without any modification to the Software. And TDS has been paid when the Resident Company (IRN) acquired the software. Should there be a TDS deduction by ABC again.

Regards

In many countries, including India, the tax deduction at source (TDS) provisions may apply to software purchases. TDS is a mechanism for collecting taxes at the source of income, and it involves deducting a certain percentage from the payment made to the vendor.

TDS is applicable @ 2%

Everyone forgot thw tgresholf limits 

TDS is applicable on the payment made to the software vendor if the payment is made to resident vendor and the vendor is providing services (and not goods) and amount is more than Rs. 30,000. The TDS rate for software purchase is usually 2% for the services provided by the vendor