TDS on Partner Remuneration and Interest under Income Tax Act, 2025: Section 393(3) vs Section 194T

CA. Keshav Kumar | Last updated: 06 July 2026

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The Income Tax Act, 2025, effective from April 2026, introduces Section 393(3) which mirrors the TDS obligations previously under Section 194T of the 1961 Act. This means firms and LLPs must continue to deduct TDS at 10% on payments like salary, remuneration, commission, bonus, and interest to partners once an aggregate threshold of £20,000 is crossed. While the core requirements remain the same, the way these obligations are cited and reported has changed, necessitating updates to accounting software and compliance procedures.

Payments made by a partnership firm or LLP to its partners - salary, remuneration, commission, bonus and interest remained outside the TDS net for decades. That position ended on 1 April 2025 with Section 194T of the Income-tax Act, 1961, inserted by the Finance (No. 2) Act, 2024. With the Income-ta

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About the Author

CA. Keshav Kumar

Chartered Accountant

About the Author I am a Chartered Accountant based in New Delhi. Before I qualified, I spent close to twelve years working on the operational side of accounts and compliance closing books, reconciling returns, and handling the everyday filings that keep a business on the right side of the law. I do not describe those ... Read more

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