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TDS on interest to partner or remuneration to partner

DMC (Student) (364 Points)

05 October 2008

Can anyone plz tell me whether TDS is applicable on interest to partners or remuneration to partners.

Also tell me whether TDS is applicable on remuneration to director and whether TDS is applicable on Audit Fees.

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8 Replies

Ramakrishna (Financial Executive) (438 Points)
Replied 05 October 2008

Dear Friend!

Interest paid on partner's Account is not liable for TDS in view of the specific exemption under Section 194A(3)(iv) of the Income Tax Act.

Remuneration to partners of firms and directors of companies are 'Salary' and therefore liable for TDS under Section 192.

Regarding 'Audit fees' paid the auditor, the same is professional payment liable for TDS under Sevtion 194J at 10% + Surcharge as applicable + Educational cess.

Good Bye! Cheers!!

CA RAMESH KUMAR AHUJA (CA, DISA, LLB) (5452 Points)
Replied 06 October 2008

Tax at Source is not deductible on Interest or Salary paid to partner as per the Partnership Deed.

CA Ravish Trivedi (The Possibilities are Infinite...) (772 Points)
Replied 06 October 2008

if Interest is paid more than partnership deed then will it change the exemption to deduct Tds 194(3)iv.

Jitender (Chartered Accountant) (8724 Points)
Replied 06 October 2008

tds on interest as well as salary is not deductible ,paid to partners.

tds on audit fees is deductible u/s 194J.

tds on director's salary is deductibleu/s 192.

srikanth (student) (1 Points)
Replied 06 October 2008

no tds on remunaration to patners

(Guest)

tds on remunaration to directors & audit fee are deductable

Ramakrishna (Financial Executive) (438 Points)
Replied 06 October 2008

Dear Friends!

As per Section 28(v) of the Income Tax Act, salary paid to a partner of partnership firm is only business income in the hands of the partner and therefore no TDS would be made on the same.

Good Bye! Cheers!!

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