Tds on purchase of software considered royalty
JAGDISH GUPTA
(Querist) 05 August 2013
This query is : Resolved
W.E.F. FY 2012-13 onwards, computer software is included in the term Royalty and hence TDS applicable on purchase of even bundled software.
In my opinion, this is not practically feasible as a walk-in customer going to purchase some box-packed ready to use software over the counter for use of his firm, how the seller store-owner allow him to deduct the TDS of seller store-owner company and how shall the seller believe buyer that he will deposit his TDS correctly to the credit of his account.
It could be made applicable only to customised software development contracts where the customer company builds up certain relationship with the developer-service provider company.
Kindly 1. Confirm that actually it has been so made compulsory to deduct TDS of seller company by buying person on purchase of bundled / packaged software;
2. How shall it be practically achieved;
3. Are there any protests / appeals / Stay Order etc against this recent amendment due to its uneasiness and impracticability;
4. Does it legally hold any ground and how to effectively challenge such rubbish enactments.
R.K Nanda
(Expert) 05 August 2013
consult tax lawyer.
