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Tds on softwarte upgradation

CA Akhil Mittaal (B.Com(h), SRCC ) (2159 Points)

13 January 2014

Dear all,

I have purchased a software for upgradation of the system ( related to manufacturing- IT related)... But while making payment i didn't deduct TDS..Now following are my queries:

1. Vendor saying i inoviced ( basic Value + CST), so NO TDS is applicable.He will be generating seperate invoice for the services he will render.

2. Now whether TDS is applicable on the upgratdation of the system....!!!

3. He imported software and he had not deducted TDS u/s 195... Please guide me in this regard.

Urgent pls reply...

Thanks & Regards

Akhil

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3 Replies

CA Saroj Kumar (Keen to learn something new every moments) (2588 Points)
Replied 14 January 2014

Please refer to this link

/forum/tds-on-software-purchase-250415.asp#.UtVOq_QW1AQ

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CA Saroj Kumar (Keen to learn something new every moments) (2588 Points)
Replied 16 January 2014

By this notification it clear that one time TDS will be deducted either by you or by ur importer which is said in clause ii(a) or (b) read with (iii).

Since in ur case the improter has not deducted TDS U/S 195 hence he has to deduct the TDS.

Read carefully please

i) the software is acquired in a subsequent transfer and the transferor has transferred the software without 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) along with the Permanent Account Number of the transferor.