TDS

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This query is : Resolved

CA Abhishek Singh (Querist)

19 April 2009 DEAR ALL

IF PARTNERSHIP FIRM MAKE PAYMENT OF ANY AMOUNT SAY RS. 500000/- TO PARTNERS BY WAY OF SALARY,REMUNERATION ETC. SHOULD PF DEDUCT TAX AT SOURCE?

BY WHAT NAME T.D.S SHOULD BE DEDUCTED?
WILL IT ISSUE FORM 16A.

Deepak Goel

Deepak Goel (Expert)

20 April 2009 If partnership firm make payment to partners by way of salary remuneration or interest on capital there is no TDS applicable.

CA.ViVeK M ACA

CA.ViVeK M ACA (Expert)

20 April 2009 In the chapter salary , it is clearly mentioned that if a partner receives salary , remuneration by whatever name it is called, the income shall be treated under Profit and gain from business and profession, it it because there is a relationship between business held by the partner and salary is provided by the surplus made by the firm .

Sanjay Soni

Sanjay Soni (Expert)

20 April 2009 agreed

Manmohan ACA, CS

Manmohan ACA, CS (Expert)

20 April 2009 No TDS SHALL BE DEDUCTED ON SALART/ REMUNERATION ETC PAID TO PAERNER BY A FIRM

Manmohan ACA, CS

Manmohan ACA, CS (Expert)

20 April 2009 As per section 194A(3)(iv)the section 194A (i.e deduction of TDS on interest other then interest on securities)SECTION 194A shall not be appliable to such income credited or paid by a firm to a partner of the firm;

Hence No TDS on Interest paid by firm to partner_______(i)

the section 192(TDS on salary) is not appliable to salary / remuneration paid by firm to its partner as there is no employer-employee relation
===
As per section 192(1)
"Any person responsible for paying any income chargeable under the head “Salaries” shall , at the time of payment ,deduct income –tax.........”
salary & remuneration PAID BY FIRM TO ITS PARTNER is not taxable as salary in the hands of partner but taxable as Profit and gain from business and profession.
Hence No TDS on SALARY/ Remuneration paid by firm to partner________________________________(ii)

By adding (i) and (ii), we get
No TDS on INTEREST/SALARY/ REMUNERATION paid by firm to partner.................("proved")

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