TDS

This query is : Resolved

Arvind (Querist)
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26 March 2010 Hi,
we have Purchase of licence Software Win2007,and in bill they have charges Service tax and vat,so my query is that on this bill we will Deduct TDS or Not and limit also crrosed? if applicable then which Section?

Thanks
Arvind

Prakash

Prakash (Expert)
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26 March 2010 Hi Arvind

TDS is not applicable.
The software is not designed to suit particulary to requirement of your company. so as a result of that there is no contractual obligation on the part of supllier to render professional service, so 194J is not applicable

Purchase of Software is in nature of payment for copyright

It has been clarified by the Supreme Court of India, in the case of TCS V State of Andhra Pradesh (2004) 271 ITR 401 (SC) that granting of such licenses for th use of software is in the nature of a payment for a copyright.
the prime intention is to use the article.

So as far as i am concerened NO TDS is Payable