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Withholding tax

udaya kumar (Partner) (78 Points)

28 December 2013

Dear all,

Can anyone help me on this. Withholding tax in respect of payment made for purchase of software without furnishing of PAN and other details at what rate tax is deducted?

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9 Replies

Akanksha Jain (Article) (690 Points)
Replied 28 December 2013

TDS is deducted @ 20% or rate specified as per Incom Tax Act which ever is higher.

This is in accordance with sec 206AA

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udaya kumar (Partner) (78 Points)
Replied 28 December 2013

Thanks, Akanksha Jain. But what is the rate specified as per income tax act as of now?

CA Mitesh N Kothari (9821662799) (391 Points)
Replied 28 December 2013

Yes Uday kumar

udaya kumar (Partner) (78 Points)
Replied 28 December 2013

Sir,the payment is made by Indian company to a foreign company does this attracts sec 115A or 195?

VIKASH KUMAR JAIN (Audit Executive) (711 Points)
Replied 28 December 2013

No TDS in case of sale, purchase transaction, then how purchase of Software liable to T.D.S.Akansha jain ji please resolve my query.

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manoj (student) (5205 Points)
Replied 29 December 2013

@ akansha udaya is asking for purchase of software so no tds

Palash Gupta (Student...Hoping to pass Inter) (892 Points)
Replied 29 December 2013

If software is purchased directly from developer then TDS liability is attracted to the Indian co. This is in applicable as mentioned in Finance Act

Akanksha Jain (Article) (690 Points)
Replied 30 December 2013

sorry guys for a late reply.. i will resolve all your quries regarding this by tomorrow.

MAS007 (ACCOUNTANT) (124 Points)
Replied 30 December 2013

pls look at the followng

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY,
PART-II, SECTION 3, SUB-SECTION (ii)]
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)
(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICATION NO. 21/2012 [F.No.142/10/2012-SO(TPL)] S.O. 1323(E), DATED 13-6-2012

In exercise of the powers conferred by sub-section(1F) of section 197A of the Income-tax Act, 1961 (43 of
1961), the Central Government hereby notifies that no deduction of tax shall be made on the following
specified payment under section 194J of the Act, namely:-
Payment by a person (hereafter referred to as the transferee) for acquisition of software from another person, being a resident, (hereafter referred to as the transferor), where-
(i) the software is acquired in a subsequent transfer and the transferor has transferred the software without any 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) of clause (ii) along with the Permanent Account Number of the transferor.
2. This notification shall come in to force from the 1st day of July, 2012.
(J. Saravanan)
Under Secretary(TPL-III)