Income-tax Act, 1961Section 194T
- Introduced from 1 April 2025
- Firm deducts 10% on payments or credits to partners
- Threshold ₹20,000 in a year
- Includes credits to partner's capital account
Applies to FY 2025-26 (AY 2026-27) and earlier years.
IT Act 1961 → 2025 / Section 194T
TDSSection 194T → Section 393
TDS of 10% by firms on salary, remuneration, commission, bonus or interest to partners
Section 194T of the old Income-tax Act, 1961 · new section 393 under the Income-tax Act, 2025
New reference Section 393(3), Table Sl. No. 7
Income-tax Act, 2025Section 393(3), Table Sl. No. 7
- Section 393(3), Table Sl. No. 7: 10%
- Threshold ₹20,000
- Covers salary, remuneration, commission, bonus or interest, including capital account credits
Applies from tax year 2026-27 (from 1 April 2026).
What changed
Moved into the section 393 table; rate and threshold unchanged.
Practice notes
- Drawings and share of profit are not covered — only the listed payments.
- Applies to LLPs as they are treated as firms for income tax.
Frequently asked
What is the TDS on partner remuneration under the new Income Tax Act 2025?
10% where salary, remuneration, commission, bonus or interest to a partner exceeds ₹20,000 in the year — section 393(3), Table Sl. No. 7.
What is section 194T called in the new Income-tax Act, 2025?
Section 194T of the Income-tax Act, 1961 corresponds to Section 393(3), Table Sl. No. 7 of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27).
What changed in section 194T under the new Income Tax Act?
Moved into the section 393 table; rate and threshold unchanged.
Is section 194T still applicable for FY 2025-26?
Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 194T of the 1961 Act. Section 393(3), Table Sl. No. 7 of the 2025 Act applies from tax year 2026-27.