Tax on purchase of Software

zara khan · 10-08-2009, 04:40 PM

our organization has purchased software from local market. is it exempted from withholding tax or not?

faisal_desperado · 10-08-2009, 04:57 PM

<blockquote id="quote">quote<hr height="1" noshade id="quote">Originally posted by zara khan
 our organization ve purchased software from local market.is it exempted from withholding tax or not?
<hr height="1" noshade id="quote"></blockquote id="quote">

Computer softwares are designed/prepared by programmers, who come under the ambit of section 153(1)b, hence 6% tax will withheld on the invoice amount.

Regards,

Riftaj · 10-15-2009, 07:21 PM

no not exempted, whenever you will pay the amount of that software you must deduct 6 % I tax from whole amount of bill, than you will pay it, the amount of I tax you must be return, you have to make this entry for I tax purposes,, DR Supplier(provider name) CR I Tax deducted from Supplier head,

Thanks

Regadss
Accounts Manager
Rifi

ote]Originally posted by faisal_desperado
 <blockquote id="quote">quote<hr height="1" noshade id="quote">Originally posted by zara khan
 our organization ve purchased software from local market.is it exempted from withholding tax or not?
<hr height="1" noshade id="quote"></blockquote id="quote">

Computer softwares are designed/prepared by programmers, who come under the ambit of section 153(1)b, hence 6% tax will withheld on the invoice amount.

Regards,
[/quote]

zara khan · 10-20-2009, 06:03 PM

what would be the rate of withholding tax on purchasing of anti-virus software.

LapTop · 10-20-2009, 06:58 PM

If u r purchasing from retailer, u cant deduct WHT , if u r purchasing from supplier & u r WH agent U/S 153 then u shell deduct WHT @ 3.5%,

faisal_desperado · 10-20-2009, 07:06 PM

<blockquote id="quote">quote<hr height="1" noshade id="quote">Originally posted by zara khan
 what would be the rate of withholding tax on purchasing of anti-virus software.
<hr height="1" noshade id="quote"></blockquote id="quote">

Dear,

This query needs clarification,
If the said software has been purchased on the basis of a contract, which stipulates conditions with regards to the post acquisition services/traning etc, then the same must be taxed at the rate of 6%.

However, if the software has simply been purchased from a supplier and no stipulations have been made, then it should be treated as a purchase of good, and accordingly the rate of tax should be 3.5%.

Let me know, if confusion still exist.

Best Regards,

LapTop · 10-20-2009, 08:37 PM

âretailerâ means a person selling goods to general public for the purpose of consumption;
I think zara purchased software for use, not for resale.

Omeir · 10-22-2009, 09:09 PM

One more thing, what if one purchases online while paying through the credit card. There will be no 3.5% or 6% deduction? How can a limited company in such way?

danishayub_76 · 10-23-2009, 08:58 PM

I just wanted to talk about the monetary limits. The witholding tax shall be deducted @6% (Services etc.) if the aggregate amount exceeds Rs.10,000/-