Dear Sir Pls clear deduction of Tds on software purchase 0r development as per custmer specification. Regards, Rajiv sinha
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Since there is specific judgment of Karantka high court addressing the similar issue, you are advised to study that decision - (2009 - TMI - 35016 - High Court of Karnataka) - As per the decision, it appears that this activity would be liable for TDS since purchase of software would include licence.
Dept. will try to disallow the expenditure in both the situations . So practically if you have strength to fight the cases then my opinions are as follows:
TDS should not be applicable in case of software purchase whereas it shall be taxable if the development is as per the customer specification.