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SECTION 194T

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This query is : Resolved

Suresh S. Tejwani (Querist)

03 March 2026 If a partner incurs travelling expenses exceeding ₹20,000 for the purpose of the firm’s business and the firm subsequently reimburses the exact amount to the partner, whether the provisions of Section 194T of the Income-tax Act, 1961 are applicable on such reimbursement?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

03 March 2026 No, the provisions of Section 194T of the Income-tax Act, 1961, are not applicable to the reimbursement of travelling expenses to a partner.
Genuine reimbursements for actual business-related expenses incurred by a partner on behalf of the firm are specifically excluded from the ambit of this section.
To ensure this exemption is valid and the payment is not viewed as a disguised remuneration, the firm must maintain proper bills and documentation to justify the expense as a reimbursement for firm business.

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