NASSCOM welcomes decision to do away with TDS

Says TDS deduction was leading to cash flow issues

PTI | May 31, 2012



Welcoming the government's decision to do away with multi-level TDS on software, industry body Nasscom said the move will benefit the IT sector and improve finances.

The issue of 10 per cent tax deduction at source (TDS) was applicable at every level of software distribution chain, right from master distributor to reseller to channel.

"This was leading to an unsustainable model for software distributors who operate on very low margins. TDS deduction was leading to cash flow issues for the dealers as well as increase in cost of software as dealers could not afford funds getting locked in for long durations," Nasscom said.

Nasscom President Som Mittal said the announcement will help alleviate industry's concerns on the issue.

Finance Minister Pranab Mukherjee today said he has constituted an advisory group to deal with international taxation, especially multi-level TDS on software companies.

"I have constituted an advisory group to resolve various issues in the area of transfer pricing and international taxation. The group has held its first meeting on May 25. On advise of group and Nasscom, I have approved issuance of a circular to avoid multi-level TDS on software under section 194 J (of the Income Tax Act). This will remove hardship in case of software distributors," Mukherjee added.

Section 194-J of the I-T Act deals with fees for professional and technical services and covers royalty and non-competence fees.

Multinational companies resort to transfer pricing to shift profits from high-tax countries to low-tax jurisdictions with a view to reducing overall tax liability.

Comments

 

Other News

Who checks the books?

I read about the news about the Coimbatore library over coffee this morning. On the face of it, the headline was about a political ‘war’ between the DMK and TVK. But what stayed with me was something much more important than the blame game behind what had transpired. A writer walking through

Development paradox: Falling poverty miracle and an inequality problem

India’s reduction in poverty over the past decade is a development achievement of considerable significance. The World Bank’s April 2026 ‘India Development Update’ estimates that the share of Indians living below the international extreme-poverty line of $3.00 per person per day i

In Arunachal, a river we call mother

In Arunachal Pradesh, the Siang is not just a river. For many of us, especially the Adi people, it is part of our family. Our grandparents fished in it. Children learned to swim in it. Our farms drink from it. When someone says a huge dam will be built on it, we do not hear the word "project".

A new retelling of the Mahabharata delves into key moments

In a time when every decision carries consequences and questions of ambition, power, loyalty, identity and moral choice continue to shape our lives, Dr. Arun Krishnan’s new book, ‘Mahakshana’ (Penguin India) offers a strikingly relevant retelling of the Mahabharata.  

Cabinet approves viability gap funding to develop grid-scale energy storage systems

The Union Cabinet, chaired by PM Narendra Modi, has approved the Viability Gap Funding (VGF) Scheme for Development of Grid-Scale Energy Storage Systems, with a total financial support of Rs.14,500 crore for the period FY 2026-27 to FY 2030-31. The scheme aims to support the development o

Cabinet creates a pathway to absorb Agniveers in Defence Forces

An objective assessment in terms of organisational requirements and operational efficiency has brought out the outstanding performance of Agniveers in terms of skills, motivation levels, physical fitness and technological prowess. As envisaged earlier, based on merit, 25% of Agniveers will be offered reg

Upcoming Conferences



-->

Archives

Current Issue

Opinion

Facebook Twitter Google Plus Linkedin Subscribe Newsletter

Twitter