No TDS on specified payment for purchase of software under 194J

CBDT issued notification (NOTIFICATION NO. 21/2012, DATED 13-6-2012) exempting the applicability of tax deduction on specified payment under section 194J for acquisition of software.

A buyer purchases software from a resident seller need not deduct tax on payment if the following conditions are fulfilled.

(i)     the software is acquired in a subsequent transfer and the transferor has transferred the software without any modification,

(ii)    tax has been deducted-

        (a) under section 194J on payment for any previous transfer of such software; or

        (b) under section 195 on payment for any previous transfer of such software from a non-resident, and

(iii)   the transferee obtains a declaration from the transferor that the tax has been deducted either under sub-clause (a) or (b) of clause (ii) along with the Permanent Account Number of the transferor.


This notification shall come in to force from the 1^st day of July, 2012.