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TDS ON REMUNERATION u/s 94T

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This query is : Resolved

MAKARAND DAMLE (Querist)

27 May 2026 There are three Partners taking remuneration Rs.4,20,000/- p a each. and TDS @ 10% has been deducted and paid u/s 194T. etds returns are filed
However in terms of profit of the partnership firm remuneration each of Rs.1,00,000/- is allowable towards remuneration to partners
My question is balance Rs.3,20,000/- can be adjusted as drawings of partner and also whether etds returns need to be revised with remuneration as Rs.1,00,000/- instead of Rs.4.20 L ?

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

27 May 2026 Excess partner remuneration beyond Section 40(b) limits becomes disallowable expenditure for the firm, but it does not automatically become drawings. If Rs.4.20 lakh was actually paid/credited and TDS u/s 194T was deducted, generally no TDS revision is required. The safer approach is to disallow excess remuneration in the firm’s tax computation while partners continue offering the full amount as taxable income.

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