CA Bijay Shrestha (Never Give up....No matter what....) (858 Points)
10 May 2013TDS on Software is not applicable as per NOTIFICATION NO. 21/2012 [F.No.142/10/2012-SO(TPL)] S.O. 1323(E),
Rachit
(Analyst)
(913 Points)
Replied 10 May 2013
TDS on customised software would fall under the purview of sec. 194J.
Ganeshbabu K
(Audit and Tax Advisory)
(48564 Points)
Replied 10 May 2013
TDS on software maintainance ,,,..194J will be applicable
no tds on purchase of software
Devendra
(Chartered Accountant)
(4775 Points)
Replied 10 May 2013
If the Software is purchased without any customization, then there is no liability to deduct TDS. Such transaction shall be treated as pure purchase by the buyer.
Whereas, if the Software is supplied as per the specifications of the customer, then TDS shall be applicable. As per my knowledgeTDS shall be deductible u/s 194C.
Regards,
Devendra Kulkarni
Rahul garg
(ca final student)
(89 Points)
Replied 10 May 2013
yes , tds shall be deductible under sec 194j
note: if the non resident transferor claims the benefit of tax treaty or favourable judicial pronouncement and consequently tax is not deducted under sec 195 then dealer or customer has to deduct tds under section 194j while making payment to distributor or dealer as the case may be
CA Bijay Shrestha
(Never Give up....No matter what....)
(858 Points)
Replied 10 May 2013
The Software developer made a software for a company as per the specification of the company but the company did not supply any materials for it. While making payment, the company deducted TDS @ 2 % u/s 194C. Is it correct?
Ganeshbabu K
(Audit and Tax Advisory)
(48564 Points)
Replied 10 May 2013
no.
TDS U/S 194 J WILL APPLY
TDS TO BE DEDUCTED AS PER 10%
To understand this notification some points must be understand first:-
1) Software acquired in subsquent transfer (means notification is not applicable if software is purchased form original developer)
2) The transferor is a resident person
3) The transferor has transferred the software without any modification (If transferor is customizing the software as per customers' requirement, then the benefit of such notification would not be available)
4) Tax has been deducted by transferor from payment of such software during any previous transfer under section 194J
5) The transferee obtains a declaration from the transferor that it has deducted tax from payment made to original developer or previous dealer
Hence, indirectly TDS is already deducted on such transfer.
CHIRAG DEEPAK GANATRA
(CA FINAL)
(1054 Points)
Replied 10 May 2013
suppose i purchased tally ERP amt 45000/- add customisation charges 35000 then TDS applicable??
Venkat
(Others)
(21 Points)
Replied 05 October 2013
Recently, we got customised software to our company. we have another company which is located in another state. first software is cost is more than Rs. 30000(as per 194J, tds limit ) ex. Rs. 50,000. we had deducted the tds(10%) of the cost. again we got another copy to our another state company. cost of the software is less than Rs. 30, 000. my question is, whether tds(10%) will attract on this cost or not... . pl. help me.
CA Netra
(Practice)
(117 Points)
Replied 22 April 2014
"B" is a Pvt Ltd Company in India which is 100% Subsidiary of German Company "A". A supplies standardised software (i.e. licence key and there is no customisation involved) to B. B in turn sells the licence key to its customer in India C without any modification.
B has deducted TDS u/s 195 @ 10% since 2011.
B is collecting VAT on the software sold to Indian customer C. No TDS deducted by C on payments to B.
Query:
1. Whether TDS is deductable on the standarised software (can be regarded as goods) being purchased from German Company ?
2. Whether VAT has to be collected on the sale to Indian Customer ? In that case we cannot take the benefit of the NOTIFICATION NO. 21/2012 [F.No.142/10/2012-SO(TPL)] S.O. 1323(E),
DATED 13-6-2012.
Please advise.
nidhi
(trainee)
(29 Points)
Replied 17 February 2015
Respected Sir
My query is that if payment is made to a company for maintenence of softwares, then tDS will be applicable under section 194C or 194I?
Kindly porvide the reason too. however if softaware is not developed by the other company but only maintanence service is provided, then what will be the implications?
Please reply asap. I will be highly obliged.
Yajuvendra Rawat
(Internal Auditor)
(296 Points)
Replied 21 July 2016
Dear Devendra,
Tax will be deducted U/s 194J @ 10% on purchase of Software as the same is Royalty by the virtue of Section 9, it will only be non deductible if it satisfies all the conditions of the CBDT Circular NOTIFICATION NO. 21/2012, but this notification is applicable only for residents, for non residents software purchase will attract TDS will be deducted U/s 195.
Rajeshwar
(Asst Manager Accounts)
(22 Points)
Replied 23 February 2017
Sir, we are buying one POS Software and it is written that ANNUAL SUBSCRIPTION POSIST PREMIUM POS @ 35000 + S.T. @ 15% Rs.5,250 = 40,250.00, Is TDS applicable in this bill or not ? If applicable whether it will come u/s 194 J or 194 C. Please advise
parul vij
(article assistant)
(59 Points)
Replied 01 November 2018
CAclubindia
