Section 195(1) of the Income Tax Act

Payments for computer software are treated as royalty income under Section 9(1)(vi) of the Income-tax Act, particularly concerning the expanded definition provided by Explanation 2 and Explanation 4.

Income is recognized when it is absolutely ascertained, determined, and specified, conferring an exclusive right of receipt upon the assessee, irrespective of the accounting period.

Payments made for mere information, not involving the imparting of secret, confidential, or specialized technical, industrial, commercial, or scientific knowledge, experience, or skill, do not qualify as 'royalty' under Section 9(1)(vi) of the Income Tax Act or relevant DTAA articles. Not every piece of commercial information constitutes royalty; expertise or skill in providing it is required.

Payments are liable for deduction of tax at source when they are in the nature of royalty. The withholding tax liability can be worked out by applying a proportion to the total remittance.

Payments for software licenses that do not involve a transfer of copyright or proprietary interest, but merely authorize end-user access and use, do not constitute 'royalty' income. Additionally, IT support services are not taxable as Fees for Technical Services (FTS) or royalty.

Payments for the use of copyrighted articles, including computer software, constitute royalty income under Section 9(1)(vi) of the Income Tax Act, and are therefore subject to withholding tax under Section 195.

Payments for strategic counselling and advisory services are not royalty if they do not involve imparting information concerning industrial, commercial, or scientific experience, but rather are for business promotion, marketing, publicity, or financial advisory services.

Payments to a non-resident agent for services rendered outside India, where the agent has no permanent establishment (PE) or business connection in India, are not chargeable to tax in India. Consequently, there is no obligation to deduct tax at source under Section 195, and no disallowance under Section 40(a)(i) can be made.

Payments for market surveys conducted for the purpose of procuring orders on a commission basis are not fees for technical services under section 9(1)(vii) of the Income Tax Act, 1961, as they are incidental to the business activity and do not involve the 'make available' clause.