TDS Rate Chart Section 194T — TDS on Payments to Partners
Section 194T — TDS on Payments to Partners
Income Tax Act 1961 — s.194T · ITA 2025 — s.393
Rate and threshold
| Condition | Rate |
|---|---|
| All covered payments | 10% |
- Threshold
- ₹20,000 aggregate per partner per FY
- Timing of deduction
- At credit (including credit to the partner's capital account) or payment, whichever is earlier. Deposit by the 7th of the following month (30 Apr for March).
- Who deducts
- Partnership firm or LLP
- Payee
- Partner of the firm (any partner — working or otherwise)
Rate history
| Period | Value | Amended by |
|---|---|---|
| From 1 Apr 2025 | 10% (section introduced) | Finance (No. 2) Act 2024 |
What this section covers
Salary, remuneration, commission, bonus, and interest (on capital or loan) credited or paid to a partner. Drawings and capital repayment are NOT covered
Worked example
LLP credits ₹6,00,000 remuneration + ₹1,50,000 interest on capital to one partner
Aggregate ₹7,50,000 > ₹20,000 → TDS 10% = ₹75,000.
Credit to the capital account counts as credit — year-end journal entries trigger the deduction even if nothing is paid out.
Under the Income Tax Act 2025
From 1 April 2026, s.194T of the 1961 Act maps to s.393 of the Income Tax Act 2025 (direct mapping, per the official CBDT concordance). Direct mapping into the s.393 TDS table under the ITA 2025.
Full 1961 → 2025 mapping for s.194T →Frequently asked questions
Does 194T cover drawings?
No — drawings and repayment of capital are not remuneration or interest. Only the five listed payment types are covered.
Does s.192 (salary TDS) apply to partner salary instead?
No. Partner salary is business income u/s 28(v), not employment salary — 194T is the operative section, not 192.
Is disallowed remuneration under s.40(b) still subject to TDS?
Yes — 194T applies on the amount credited/paid regardless of how much is deductible to the firm under s.40(b).