TDS on Customized Software

This query is : Resolved

PUTTA MAHESH (Querist)
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17 December 2008 Please clarify, whether TDS is applicable on Customized software or not. If yes, then under which section it is applicable.

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)
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17 December 2008 No, this is not covered by TDS. It is a simple purchase of fixed assets.

Ravikumar.G

Ravikumar.G (Expert)
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17 December 2008 there is no need to deduct tax at source if there is purchase of copyrighted software and not the copyright.

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CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)
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18 December 2008 In case the Software is developed to meet out the requirements of the user the Tax at source is deductible u/s 194J of the Income Tax Act. However, no Tax is to be deducted at source on purchase of readymade s/w with some customisation without any extra cost.