TDS ISSUE FOR PARTNERSHIP FIRM

[Guest]

I am a partner of a Firm having 4 partners, running a franchisee business of a stock broker .The income is

 coming in my  name which is credited to the Firms current account . the

franchiser is remitting TDS in my  name as I have signed franchisee agreement with them and also they are

 paying commission in my name. The  firm files return and shows the My TDS  in the firm's account. The firm got a demand notice from IT department stating that the firm has to pay tax and the partner has to claim TDS refund. As per partnership act the amount received in the name of any partner on behalf of the firm can be treated as firm's income, why the IT department is not allowing to set-off the TDS. They are telling the new software doesn't allow to  set-off. What is the solution for this issue?????? WHY THE SOFTWARE IS MADE

 UNCOMPATIABLE WITH ACT?

[DR.MARIAPPAN GOVINDARAJAN]

Whether you have got clarified in the said issue? If not please inform.

AI Summary

Tax deducted at source on partner receipts may be miscredited to an individual, complicating TDS adjustment against firm liability. Receipts and commission for a franchisee business are taxed and TDS is credited in the name of an individual partner though funds are credited to the firm; the firm reports the TDS but the tax office demands the firm pay the tax and directs the partner to claim refund. The issue raises the conflict between Partnership Act attribution of partner-received amounts as firm income and revenue software or administrative processing that prevents setting off TDS against the firm's liability.