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tds on software sale

abid (accountant) (169 Points)

03 September 2007

hi if we purchase a software whether it will fall in tds criteria and whether there is a need to deduct tds or not ? if yes on what percentage and under which section.

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11 Replies

CA RAJESH GUPTA (CA) (321 Points)
Replied 03 September 2007

I hope no TDS should be deducted on sale of software. it can never be treated as services.

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MAHENDRA IYER (SERVICE) (315 Points)
Replied 04 September 2007

Software designed based on customer specification would attract TDS under 194J, if it is a readymade software it will not attract TDS.

Jiten (CA) (167 Points)
Replied 04 September 2007

but in case of sale of readymade software u have to charge sales tax. coz it will be treated as goods.

tushar jain (Service) (107 Points)
Replied 06 September 2007

it depends on the nature of transaction between you and your vendor. if you have asked him to develop a software specially for you as per your guidelines and specfications then you will pay him the cost of software and cost of services. TDS will be deducted on the services component. However if you have purchased the software as it is, i.e. the one which is offered for retail sale, then you are not required to deduct any TDS.

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CA AYYAPPA (Chartered Accountant) (272 Points)
Replied 08 September 2007

Purchases are excluded from TDS deductions.

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ambika (Student) (64 Points)
Replied 08 September 2007

Software designed based on customer specification would attract TDS under 194J, if it is a readymade software it will not attract TDS.

Ramdas (Auditor) (0 Points)
Replied 06 May 2008

What is the TDS procedure for Software Company

(Guest)

softwares which are being used by every one in general and not per specifications between the parties will not attract tds.Howevev use of licenced software will attract tds as it is amended in sec 194J under royalties

(Guest)

As per new service tax circular on sale of software we have to collect vat + service tax, Is TDS applicalbe on the bill amount ?

Sudha (working) (25 Points)
Replied 14 October 2008

Originally posted by :abid
"	hi if we purchase a software whether it will fall in tds criteria and whether there is a need to deduct tds or not ? if yes on what percentage and under which section.	"

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(Guest)

Originally posted by : Guest
	As per new service tax circular on sale of software we have to collect vat + service tax, Is TDS applicalbe on the bill amount ?

That's Right! I m tottaly agree with this quote.

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