Sunday, August 2, 2009

Taxes for software development?

A friend of mine has started a new company offering software development services. Now, he's getting lots of contradictory advises from various tax experts regarding Tax for software.





He mainly does customised software development. He doesn't have any products as such. And he says his software is built using Free and Open Source tools like linux.





Now, is VAT applicable or is it service tax ? And if VAT, how much VAT must he collect ?





The company is based in Bangalore, Karnataka, India.

Taxes for software development?
Service Tax has been replaced by VATin many states. Is he doing offshore development work? Has he registered his company?





I am very happy to see that someone wants to be his own master. The best place to go for advice is NASSCOM. Mr Kiran Karnik who heads NASSCOM will help you. They have a separate cell for this purpose.


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