Section 195(2) 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.

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 for services are liable for deduction of tax at source, and withholding tax liability can be calculated by apportioning the remittance if only a portion of the services are considered royalty.

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.

Payment for subscription-based access to an offshore database containing financial or economic information is not considered 'royalty' under Section 9(1)(vi), as merely making such information available does not amount to 'imparting information concerning industrial, commercial or scientific experience'.

Professional fees for strategic counselling and advisory services, including business promotion and marketing, do not constitute royalty income if they do not involve imparting confidential information or industrial, commercial, or scientific experience as defined under royalty provisions, thus not attracting withholding tax.

The case elucidates the meaning of 'management services', detailing its components and considering whether such services qualify as 'technical services' for income tax purposes, particularly in relation to fees for technical services.