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TDS..........its very urgent

Lalit aggarwal (.) (371 Points)

15 July 2010

one of our client purchase software from microsoft nd sale it to other customers.......nd the curtomers pay to client after deducting TDS.......he take only 2% margin on it nd the customers deducting TDS at the rate of 10%........i think it is simple trading so their is no liab. of TDS.....so what u suggest... its very urgent plz help

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8 Replies

Milan Somani (CA) (1456 Points)
Replied 15 July 2010

As its normal sale-purchase transaction, TDS need not be deducted.

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AMIT KUMAR (PCC) (38 Points)
Replied 15 July 2010

I am agree with Milan Somani. it is normal sale & purchase so there is no tds liability but if your client make sale on commission basis then there is tds liability

Shudhanshu Agrawal (Business) (2570 Points)
Replied 15 July 2010

The actual transaction is in between your friend and company which purchased software. As it is just a sell of software then it should not be considered u/s 194J so the rate of 10% is totally wrong. Now it can fall under section 194C only but in that section TDS is not applicable on purchase of assets. So alltogether TDS will not be applicable in this case.