Save Rs 499 on a 2-Year Ad-Free CAclubindia Pro Membership. Subscribe Now!

Regarding 194T: TDS on Payment by Partnership Firm to Partners

517 views 1 replies

Neeraj

Accountant

33 Points Posted on 11 September 2024

A situation where the remuneration of the partner depends on the profitability of the firm, which in case is practically determined once the books of the firm are closed for the financial year after 31st March. after that the firm will deduct TDS from Partners account.

but Remuneration & Interest is only income of the said partner on which he already paying advance tax installment.

so he should pay advance tax installment ? or wait for TDS to be deducted by the firm

& what will be interest payable against late payment of liability of Income Tax.

Replies (1)

Rama chary Rachakonda

Master in Accounts & high court Advocate

9620 Points Posted on 11 September 2024

Your question revolves around advance tax installments and TDS (Tax Deducted at Source) for a partner's income from a firm. Here's a breakdown: 1. _Advance tax installments_: The partner should continue paying advance tax installments on their income from the firm, including remuneration and interest. This is because advance tax is payable on estimated tax liability for the year. 2. _TDS by the firm_: The firm will deduct TDS on the partner's income, including remuneration and interest, as per the applicable rates. 3. _Late payment interest_: If the partner fails to pay advance tax installments or pays late, they will be liable for interest under Section 234C of the Income-tax Act, 1961. To avoid interest liability, the partner should: - Pay advance tax installments on time. - Ensure the firm deducts TDS on their income. - File their tax return (Form ITR-4) and pay any balance tax