Tds applicability ♦ very urgent

This query is : Resolved

Neha Mishra (Querist)
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12 May 2014 Dear Sir

We purchased Customized ERP Software

Licence Fees Rs.100000
AMC Charges Rs. 78000
Implementation Charges Rs. 89000

Whether we are liable to deduct TAX at source

if yes

then

1. under which section?
2. rate ?
3. Amount on whiCH TDS to be made ?

very Urgent

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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12 May 2014 TDS to be deducted on total amount u/s 194J @10%.

CA Umesh kumar Mantri

CA Umesh kumar Mantri (Expert)
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12 May 2014 There will be no Requirement of deduction of TDS on Licence fees and implementation Charges.

You required to deduct TDS only AMC charges under section 194 J.

Please see the notification :

http://www.itatonline.org/info/wp-content/files/cbdt_notification_software_purchase_TDS.pdf

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Nikhil Kaushik

Nikhil Kaushik (Expert)
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13 May 2014 Dear Umesh,

Please note that the said circular only applies to softwares transferred without modification. the querist has already stated that it is a customized software. Hence, the document being referred by you wont be relevant in this case.

CA Umesh kumar Mantri

CA Umesh kumar Mantri (Expert)
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13 May 2014 So MR. Nikhil What do u think?

We should deduct the TDS or not?

CA Umesh kumar Mantri

CA Umesh kumar Mantri (Expert)
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13 May 2014 I think if we Purchase software directly from Developer then required to Deduct TDS otherwise not, subject to declaration given by Such Dealer, As per notification

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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18 May 2014 In customized softwares there is always some modification. So in the given case TDS should be deducted u/s 194J.