TDS on software license

[Guest]

Dear Sir,
Your  reference  is given by NIRC team

Please guide us under which section TDS to be deducted   & what rate (under Income Tax Act)

Transaction details are:-

1.       Buyer(our co.)  is corporate entity (Ltd. Co.) registered in India.
2.       Purchasing 200 Original License of Micro soft (Only License).
3.       Supplier is dealer of Microsoft at Delhi Location. Supplier is Corporate entity (Pvt. Ltd.) registered in India.
4.       Supplier is charging 5% VAT & 10.3% Service Tax in the quotation.
 
Waiting for your valuable guidance.

AI Summary

Guidance Sought on TDS for Software Licenses: Anuj Gupta Recommends 10% Under Section 194J; Verify Case Alignment A corporate entity in India is seeking guidance on the applicable section and rate of Tax Deducted at Source (TDS) for purchasing 200 software licenses from a Microsoft dealer, who is also a corporate entity in India. The supplier is charging VAT and service tax. Anuj Gupta responds, suggesting that TDS at 10% under section 194J may be appropriate, referencing a Delhi High Court decision indicating no TDS liability if the software is purchased and resold in the Indian market. The entity is advised to verify if their situation aligns with the case facts.