30 January 2014
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%.
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