The Cross-Border Software Purchase Conundrum: Supreme Court's Clarification on TDS for Non-Resident Software Transactions as Royalty

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ted v. The Commissioner of Income Tax Anr. revolves around the taxation of payments made for the purchase of computer software from non-resident suppliers. This landmark judgment delivered by the Supreme Court, addresses several appeals that raised questions regarding the classification of such payments whether they should be treated as 'royalty' or as business income, thereby determining .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... the classification of payments made for software purchases from non-resident suppliers whether these constitute 'royalty' under sections 9(1)(vi) and 195 of the Income Tax Act and, consequently, whether such payments are subject to TDS. Applicability of DTAAs : Another significant issue was the applicability of Double Taxation Avoidance Agreements between India and the countries of the fo .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ce under section 195 of the Income Tax Act, noting that such deduction is mandated only if the payment to the non-resident is chargeable under the Act, taking into account the beneficial provisions of applicable DTAAs. Software Purchases as 'Goods' : The judgment also touched upon the classification of software purchases, observing that in certain cases, software could be considered as  .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X