TDS Applicability on Software Licence

[Finance Team]

Hi,

We have purchased 500 Software Licence for our own use. These licence are valid for 1 yr only.

As per notification no 21/2012. TDS is not applicable only when purchased software is subsequent transfer/sale.

Whether TDS is applicable or not in our case?

Regards

[Vijay Chitte]

Yes TDS is applicable, such type of licence is for limited purpose and such software is not sold.

AI Summary

TDS on software licences applies where licences are time limited and not a sale, requiring tax deduction at source.
TDS is chargeable on payments for time limited software licences provided for the purchaser's use when the transaction does not constitute a sale or subsequent transfer; the exemption limited to transfers/sales does not apply, so the payer must deduct tax at source on such licence payments.