Hello everyone,
I have a query about TDS 94T – payments to partner.
If partner is not drawing any salary & has no other income from firm, except profit share, he is withdrawing money on monthly basis on basis of expected profit share – in such case, is TDS applicable under section 94T.
No TDS under Section 194T is applicable on monthly withdrawals taken by a partner purely against expected share of profit, provided:
No salary / remuneration / interest is payable, and
The amount is ultimately adjusted against profit share.
Thank you Ashok Kumar ji for your very clear reply.
Share of Profit exempt U/s 10(2A) not subject to TDS.
Section 194T covers only specific payments to partners: salary, remuneration, commission, bonus, and interest paid by the firm. Plain profit share (the partner's share of the firm's net taxable income under section 10(2A)) is not in that list and is not subject to 194T TDS. The confusion comes from monthly drawings, which often include a mix of advance against profit and actual remuneration. If the drawing is purely against expected profit share, no TDS applies. If any part is classified as salary or interest on capital under the partnership deed, that part is covered. You can check how the TDS section framework changed this year in this [FY 2026-27 TDS changes guide](https://taxgarden.in/blog/tds-tcs-changes-fy-2026-27-complete-guide).
CAclubindia
Pro
Modal body text goes here.
CAclubindia
