Demystifying the Software Taxation in India

  • Tanay Vyas
  • Show Author Details
  • Tanay Vyas

    Student at Jindal Global Law School, OP Jindal Global University, India

  • img Download Full Paper


With the extensive and rapid growth of the Information Technology, the dependency on the softwares, imported/purchased from a non-resident, foreign supplier or manufacturer, too has increased a lot. However, the increasing use of the software driven computers has shown a far reaching implication on the tax regime of India. The major debate was about, whether the income earned from the payment made towards the import/purchase of the software by a resident in India from a non-resident supplier, was deemed to be earned from the transfer of copyrighted right or the copyrighted article and whether the importers/purchasers of software were required to withhold tax, in form of ‘Tax Deducted at Source’, on the aforesaid payments. The dispute of taxation of softwares had taken a toll on the software purchasers/importers and it is after a couple of decades that the Apex Court ruled that the payments made towards the purchase of the softwares do not fall under the ‘Royalty’ and are to be treated as purchase of products and therefore a tax liability does not arise in India.




International Journal of Law Management and Humanities, Volume 4, Issue 2, Page 2184 - 2189


Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution -NonCommercial 4.0 International (CC BY-NC 4.0) (, which permits remixing, adapting, and building upon the work for non-commercial use, provided the original work is properly cited.


Copyright © IJLMH 2021