Tds on payroll software purchase

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Querist : Anonymous

Querist : Anonymous (Querist)

03 May 2016 Dear Expert,

Kindly guide me whether TDS would be applicable for buying payroll software from Indian Company? Both are indian companies -

Thanks in advance

Rupesh Jain

Rupesh Jain (Expert)
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03 May 2016 no tds is not applicable on purchase of software

NOTIFICATION NO. 21/2012 [F.No.142/10/2012-SO(TPL)] S.O. 1323(E), DATED 13-6-2012

In exercise of the powers conferred by sub-section(1F) of section 197A of the Income-tax Act, 1961 (43 of
1961), the Central Government hereby notifies that no deduction of tax shall be made on the following
specified payment under section 194J of the Act, namely:-
Payment by a person (hereafter referred to as the transferee) for acquisition of software from another person, being a resident, (hereafter referred to as the transferor), where-
(i) the software is acquired in a subsequent transfer and the transferor has transferred the software without any modification,
(ii) tax has been deducted-
(a) under section 194J on payment for any previous transfer of such software;or
(b) under section 195 on payment for any previous transfer of such software from a non-resident, and
(iii) the transferee obtains a declaration from the transferor that the tax has been deducted either under sub-clause (a) or (b) of clause (ii) along with the Permanent Account Number of the transferor.
2. This notification shall come in to force from the 1st day of July, 2012.
(J. Saravanan)
Under Secretary(TPL-III)

CA ALOK KUMAR

CA ALOK KUMAR (Expert)
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04 May 2016 If you are using software for your own business purpose, TDS would be deducted. However, if it's for subsequent sale without any modifications, no TDS deductible as per the circular mentioned in previous reply. For any further query, you may write us to info@wealth4india.com or call us @9818167102. Alternatively, you may request call back @ www.wealth4india.com Thanks...

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Querist : Anonymous

Querist : Anonymous (Querist)

04 May 2016 Dear Expert,

We are buying software from Indian company and we are also indian company. We are buying payroll processing software so TDS would be deducted?/?? under which section and at what rate?

Thanks in advance

CA ALOK KUMAR

CA ALOK KUMAR (Expert)
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04 May 2016 TDS is required to be deducted U/S 194J

Querist : Anonymous

Querist : Anonymous (Querist)

04 May 2016 which section and what rate?? Many thanks for your reply.