Does my firm need to deduct TDS on a partner's remuneration or interest (Section 194T)?
Category
Rates & sections
Answered by
A CA firm
Bottom line
Yes — from 1 April 2025, firms and LLPs deduct 10% TDS on salary, remuneration, interest, bonus or commission paid to a partner once it exceeds ₹20,000 in the year.Section 194T, effective 1 April 2025, requires every partnership firm and LLP to deduct 10% TDS on remuneration, salary, bonus, commission or interest paid or credited to a partner where the aggregate exceeds ₹20,000 in the financial year.
TDS is triggered on credit (including credit to the partner's capital account) or payment, whichever is earlier. Mere withdrawal of the partner's own capital is not covered. There is no turnover threshold — it applies to firms of every size.
General information for FY 2026-27 under the Income-tax Act 2025, not advice on your specific case. Verify against the latest law or ask a CA before acting.