Applicability of TDS on Royalty payment to US based Copyright Holder on sale and distribution of cinematographic films on DVD and VCD

Recently, the Mumbai bench of the Income-tax Appellate Tribunal (the Tribunal) in the case of Asia vision Home Entertainment Pvt. Ltd. Vs ACIT has held that royalty paid for the distribution and marketing of cinematographic film on DVD and VCD cannot be considered as royalty paid for TV or radio broadcasting rights and for the purpose of dis allowance under section 40(a) of the Income-tax Act, 1961 (the Act) ‘royalty’ shall have the same meaning as provided under explanation 2 to section 9(1)(vi) of the Act.

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