Partner payment withholding requires firms to deduct tax on qualifying payments or capital-account credits beyond the applicable threshold.

Section 393(3), Table serial no. 7, requires a firm to deduct tax at source on salary, remuneration, commission, bonus or interest paid or credited to a partner. The obligation covers payment and credit, including entries in the partner's capital account, and arises at the earlier of credit or payment. Deduction applies at a fixed rate of 10% where aggregate payments or credits exceed the applicable threshold. The treatment substantially corresponds with section 194T for covered payments, payer, recipient and timing.

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