Tax treatment of systems software exempts lump-sum payments from income tax and withholding when bundled with hardware.
Lump-sum payments for systems software supplied with hardware and imported by software exporters will not be liable to income-tax in India as royalty or otherwise and may be paid without deduction of tax at source under section 195(1); application software under an approved export scheme remains subject to income-tax on the licenser, and the concession applies for the current and subsequent financial years.