TDS Section 194T for earning of partner

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This discussion clarifies the applicability of TDS Section 194T on remuneration or bonus payments made to partners in a firm. Even if remuneration is fixed after profit and loss finalisation, TDS is still applicable. The firm is responsible for deducting TDS, and this does not negate the partner's obligation to pay advance tax. It's recommended to deduct TDS and then adjust the advance tax liability accordingly to avoid potential interest payments.

binu sukumaran

binu sukumaran (Querist)

29 January 2025 Sir.
I heard about new section 194 T tds to payment( remuneration, bonus etc)to partner.
In our friend case remuneration is fix at the end which check profit and loss finalised.
In this case 194 T is applicable.
Please advise.
Binu

Nikhil Kaushik

Nikhil Kaushik (Expert)

29 January 2025 you can close your books on 31st March. since the TDS is due for deduction by 30th April, you have ample time to compute and deduct the appropriate amount of tax.

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binu sukumaran

binu sukumaran (Querist)

30 January 2025 Thanks for your valuable information.
we make payment advance tax in each quarter , which is appox more than tds 10%.Let's me know which is one (TDS OR advance tax) more important in financial aspect (Interest payment )

Nikhil Kaushik

Nikhil Kaushik (Expert)

30 January 2025 have no correlation between the two. advance tax paid by the partner does not absolve the partnership firm from its liability to deduct TDS. The better approach is to deduct TDS and adjust advance tax liability accordingly.

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binu sukumaran

binu sukumaran (Querist)

02 February 2025 sir,
Thank you for your update .

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