Tds on use of trademark

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Mridul Kogta (Querist)
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17 June 2015 One of my client have a registered trademark. He is not using the Trademark. I have made an agreement for use of his registered Trademark
Whether, I would be liable to deduct TDS on payment of use of Trademark

If yes, then which section ???

srinivasan

srinivasan (Expert)
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18 June 2015 This will fall under the definition of Royalty first proviso and the TDS with pan would be 10% and without PAN @ 20% u/s 206AA.

On reading the first proviso to sec.9(1)(vi)one can infer that the trademark is also included under the royalty.

However if the trademark is transferred for a lump sump then it will not fall under the definition of royalty and no TDS is required to be deducted on the same. But VAT may come into plat depending upon the state VAT act.