Appliacbility of tds on development of software

[Shreenivaas Nallur Dharma Rau]

whether TDS is attracts on development of software for i house use where the price is incusive of VAT

AI Summary

TDS not applicable on in-house software purchase with VAT paid; Sections 194C and 194J don't apply. A query was raised regarding the applicability of Tax Deducted at Source (TDS) on the development of software for in-house use where the price includes VAT. A respondent clarified that TDS provisions under sections 194C and 194J generally apply to work contracts and professional services, respectively. However, since the query pertains to the purchase of software rather than the provision of services, and VAT has been paid by the supplier, TDS is not required to be deducted in this scenario.