PURCHASE OF SOFTWARE FROM GLOBAL VENDORS ATTRACT TDS
The Karnataka High Court has ruled that technology firms are subject to withholding tax (deduction of tax at source) on purchase of software from global vendors such as Microsoft. This would push
technology firms and branded software distributors into a corner as they will be required to withhold 10- 20% on their software sale.The division bench of Justice DV Shylendra Kumar and Justice Arvind Kumar pronounced the judgment while upholding an appeal by the income-tax department that technology firms were legally obliged to withhold tax on software purchases. The order is with retrospective effect.
technology firms and branded software distributors into a corner as they will be required to withhold 10- 20% on their software sale.The division bench of Justice DV Shylendra Kumar and Justice Arvind Kumar pronounced the judgment while upholding an appeal by the income-tax department that technology firms were legally obliged to withhold tax on software purchases. The order is with retrospective effect.
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