Tds deduction of accounting software purchase & developemen

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 December 2013 We purchase a Accounting Software for Billing and Payroll and paid to the Company accordingly.

The payment include the Software Value and Monthly subscription Charges for software support.

Can we deduct the TDS on the payment made to them ?

Please advice at earliest

Nitin Bhuta

Nitin Bhuta (Expert)
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02 December 2013 Yes TDS to be deducted u/s 194J of the Income Tax Act 1961 in respect of software support services.

If It is composite contract for development at your company's instance then TDS is required to be deducted on total value.

if it is purchase of off the shelf software then it is purchase of product without any customisation then no TDS because transaction is in the nature of purchase of product.