{"url":"https://lrlabs.ai/t/software_royalty_two_node","engine":"deterministic","llm_in_path":false,"id":"software_royalty_two_node","question":"Are payments to a non-resident for software licences royalty under Indian law?","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","confidence":"settled","as_at":"14 Aug 2026","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","quote_string_verified":true,"quote_source":"rule:WHT.SOFTWARE-NO-SHIELD.INUS"}