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

[Guest]

as per my view, most likely provisions of tds are 194C for carrying out any work and 194J for providing professional and technical service. it appears that your query is not related to provision of any service but it is related to purchase of software. On purchase of software, as evident from the details of VAT paid by the supplier, you are not required to deduct any TDS on the same.

AI Summary

TDS on software purchases may not apply where the transaction is a purchase and VAT is charged by the supplier. TDS applies to payments for work or professional/technical services, but a purchase of software treated as sale-with VAT charged by the supplier-is not subject to TDS. If the transaction in substance constitutes development or technical services rather than a transfer of software as goods or a licence, withholding obligations may nevertheless apply; therefore the legal characterisation of the supply governs TDS treatment.