Abstract: A torque transducing system for an impact tool such as an impact wrench incorporates a housing, bearings in the housing, a rotatable shaft journalled in the bearings, the shaft having a torque receiving input end and an output end supplying torque for a workpiece, a torque transducing gauge on the shaft intermediate the input and the output end for providing a first signal responsive to torque, circuitry on the rotatable shaft for modulating the first signal to a second signal, structure on the shaft for supplying current to the gauge and modulating circuitry and additional structure for transmitting the second signal, further structure on the housing for receiving the transmitted second signal, and circuitry for converting the second received signal to provide an output indicative of torque.