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TDS on partners remuneration

Vijay Mohan (654 Points)

19 March 2025

TAN registration mandatory for partnership firm for deducting tds on partners remuneration.

From which AY it will be applicable

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Rama chary Rachakonda (Master in Accounts & high court Advocate) (8722 Points)
Replied 19 March 2025

As per the Income-tax Act, 1961, a partnership firm is required to deduct Tax Deducted at Source (TDS) on partner's remuneration. To comply with this requirement, the partnership firm must obtain a Tax Deduction and Collection Account Number (TAN). Mandatory TAN Registration: The Finance Act, 2021, introduced a new provision, Section 194A(3A), which mandates TAN registration for partnership firms deducting TDS on partner's remuneration. Applicability: This provision is applicable from the Assessment Year (AY) 2022-23 onwards. Key Points: 1. *TAN Registration*: Partnership firms must obtain a TAN to deduct TDS on partner's remuneration. 2. *TDS Deduction*: TDS must be deducted on partner's remuneration as per the applicable rates. 3. *Quarterly TDS Statements*: Partnership firms must file quarterly TDS statements (Form 26Q) to report the TDS deducted. Next Steps: 1. *Apply for TAN*: If you haven't already, apply for a TAN through the NSDL website or a TAN facilitation center. 2. *Deduct TDS*: Ensure you deduct TDS on partner's remuneration as per the applicable rates. 3. *File TDS Statements*: File quarterly TDS statements (Form 26Q) to report the TDS deducted. Consult a tax professional or chartered accountant to ensure compliance with TDS regulations and TAN registration requirements.

K L Narasimham (CHARTERED ACCOUNTANTS) (54 Points)
Replied 19 March 2025

Pl let me know if a Partner can submit Form 13 and request for issue of NIL TDS certificate.

Rama chary Rachakonda (Master in Accounts & high court Advocate) (8722 Points)
Replied 19 March 2025

As per the Income-tax Act, 1961, a partner can submit Form 13 to request a Nil TDS certificate, but there are certain conditions and requirements. Eligibility: A partner can submit Form 13 if: 1. *No tax liability*: The partner does not have any tax liability for the financial year. 2. *No TDS deductible*: No TDS is deductible from the partner's share of income from the partnership firm. Conditions: Before submitting Form 13, the partner must: 1. *Verify the partnership deed*: Ensure the partnership deed allows the partner to request a Nil TDS certificate. 2. *Obtain a certificate from the firm*: Get a certificate from the partnership firm stating that the partner's share of income is not liable to TDS. Procedure: To submit Form 13: 1. *Fill the form*: Fill Form 13 with the required details, including the partner's PAN, name, and address. 2. *Attach supporting documents*: Attach the certificate from the partnership firm and any other supporting documents. 3. *Submit the form*: Submit Form 13 to the Assessing Officer (AO) or the designated authority. Issuance of Nil TDS Certificate: If the AO is satisfied with the application, they will issue a Nil TDS certificate in Form 16A or Form 16B, as applicable. Please consult a tax professional or chartered accountant to ensure compliance with tax regulations and to verify the specific requirements for your situation.

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