Deduction of TDS on payment of salary, remuneration, interest, bonus or commission by partnership firm to partners (applicable with effect from 1-4-2025) – Provisions at a glance

 Deduction of TDS on payment of salary, remuneration, interest, bonus or commission by partnership firm to partners (applicable with effect from 1-4-2025) – Provisions at a glance

Payment from which TDS is to be deductedSalary, remuneration, commission, bonus and interest paid/credited to a partner of a firm/LLP
Thho is liable to deduct TDSFirm/LLP
Deductee/payeePartner of the firm/LLP, including a minor admitted to the benefits of partnership
Payees entitled to receive payment without deduction of TDS
Threshold limit for non-deduction of TDS₹ 20,000
Tax base i.e. the amount on which TDS % is to be applied for computing TDS to be deductedSalary, remuneration, commission, bonus and interest to any account (including capital account) of the partner of the firm under the purview of TDS for aggregate amounts of more than ` 20,000 in the financial year. If threshold exceeded, TDS to be deducted on entire amount of salary, remuneration etc. and not merely the excess over ₹ 20,000
Applicable rate of TDS10%
If the payee partner is a resident, no surcharge/health and education cess
If the payee partner is a non-resident, 10%+ applicable no surcharge +4% health and education cess
Rate of TDS if PAN/Aadhaar of payee partner is not available20%
Wheater provisions of higher TDS rates for ITR non-filers (Section 206AB) is applicable to Section 194TNo.
Time of deductionAt the time of credit of such amount to the account of the partner (including the capital account) or at the time of payment thereof, whichever is earlier
Whether the payee partner can obtain certificate u/s 197 for no TDS or TDS at a lower rateNo.
Whether the payee partner can avail the facility of nil TDS deduction by submitting self-declaration in Form 15G/Form 15HNo.
Adjustment of excess/deficiency in TDS deduction from subsequent deduction in same FYNo.
Deposit of TDS deducted to the credit of Central Govt.Yes.
Furnishing of TDS returns/statements by the deductor to DepartmentYes.
TDS certificate to be issued by deductor (firm/LLP) to deductee (partner)Form No. 16A
Annual statement to payees to be furnished by Department
Furnishing of statement in respect of payment of any income to residents without TDSNo such requirement prescribed for Section 194T yet
Consequences of non-deduction or short-deduction of TDS

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