Is payment for the purchase of software treated as Royalty under the Income Tax Act?

Last updated: 16 July 2021
Quick Summary
This Income Tax Appellate Tribunal case examines whether payments made for software purchases constitute royalties under the Income Tax Act and relevant Double Taxation Avoidance Agreements (DTAA). The Assessing Officer (AO) initially viewed the payment as royalty, requiring Tax Deducted at Source (TDS). However, both parties agreed that the issue is now settled by a Supreme Court decision. The Tribunal noted that the facts were similar to a previous Karnataka High Court ruling in the assessee's own case, which favoured the assessee.

Court :
ITAT Bangalore

Brief :
 Present appeal has been filed by assessee against order dated 30/03/2019 passed by Ld.CIT(A)-12.

Citation :
IT(IT)A No.1514/Bang/2019

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1 Year PLAN
1999
(Excl. of GST ₹359)

BEST VALUE
2 Years PLAN
3499
(Excl. of GST ₹629)

3 Months PLAN
999
(Excl. of GST ₹179)

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