Tds applicability on commission

[anil kalia]

A partnership firm is paying commission to its partners. The payment of commission is duly authorised by the partnership deed and is allowable u/s40(b) of the Income Tax Act, 1961. Pl advice whether the firm is liable to deduct TDS U/s 194H on commission paid to partners.

AI Summary

Partnership Firm Not Required to Deduct TDS on Commission to Partners under Section 194H, Deemed Remuneration per Section 40(b). A partnership firm is paying commission to its partners as authorized by the partnership deed, questioning if it must deduct TDS under Section 194H of the Income Tax Act, 1961. Two responses clarify that TDS is not applicable. The first response explains that the commission is considered remuneration under Section 40(b) and not subject to TDS due to the absence of an employer-employee relationship. The second response concurs, confirming that TDS is not required on payments to partners and offers further clarification via email.