[ compiled answer ]
law as at 14 Aug 2026 · settled
Are payments to a non-resident for software licences royalty under Indian law?
The compiled answer
The outcome turns on treaty entitlement. TREATY-ENTITLED payee (TRC + Form 10F under s.159(8), treaty in force): NOT royalty — NO withholding on an EULA/copyrighted-article payment. NON-treaty payee, or the s.159(8) gate unmet: royalty — 20% withholding under s.207(2) (plus surcharge and cess). Why two answers: s.9(6)(c)(i) of the Income-tax Act 2025 (old Explanation 4) deems software payments royalty domestically, in terms; Engineering Analysis (2021) 10 SCC 1 (review petitions dismissed 23 Apr 2024 and 11 May 2026) holds an EULA or distribution payment for a copyrighted ARTICLE is not consideration for the use of copyright, so it falls outside the TREATY royalty definition, which prevails only via s.159(4) (old s.90(2)) for a payee who can invoke it. "Software is not royalty" is a one-node answer to a two-node question.
Pinpoint
s.9(6)(c)(i) + s.159(4), Income-tax Act 2025; Engineering Analysis (2021) 10 SCC 1
String-verified quote
“transfer or grant of all or any right for use or right to use a computer software (including granting of a licence) irrespective of the medium through which that right is transferred”
source: rule:WHT.SOFTWARE-NO-SHIELD.INUS — verified at load; a quote that stops matching its source is a compile error
Computed by a deterministic engine over compiled law — no generative model in the evaluation path. JSON twin: /t/software_royalty_two_node.json · Ask with YOUR facts: GET /compute?lookup=… · MCP: POST https://lrlabs.ai/mcp (lookup_compiled_rule)