Tds problem

This query is : Resolved

jitender (Querist)
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26 March 2013 Dear Sir

This is with reference to TDS on purchases of Microsoft Licenses, following are details :

Basic .. Rs.1000000

Service tax @ 12.36% on basic .. Rs123600

Vat @5% on basic+ser tax.. Rs.56180

Total .. Rs.1179780

You are requested to advice whether TDS needs to be deducted for the above transaction and under which section and on what amount.

Sambu Suresh

Sambu Suresh (Expert)
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26 March 2013 Finance Act 2012 has amended the definition of “royalty”. The amendment in section section 9 (1) (vi) now defines ‘royalty’ as any ‘right for use’ or ‘right to use’, a computer software (including granting of a license), irrespective of the medium through which such right is transferred.

Section 194J provides for deduction of tax at source on payment of professional fees, technical fees, directors remuneration and royalty payments

Hence payments towards right to use computer software will be liable to tax deduction at source under section 194J @ 10%

And deduct the amount on the total value including the service tax and VAT

Suresh sambu