*Attention Partners in Firms and LLP's Big TDS Update Effective 1st April 2025: The Finance (No. 2) Bill, 2024 introduces a new provision—Section 194T—to the Income Tax Act, bringing TDS @10% on certain payments made by firms to their partners. *Key Highlights:* ✅ Who’s Affected? All partnership firms and LLPs making payments to partners. ✅ What’s Covered? Payments like salary, remuneration, commission, bonus, and interest on capital. ✅ Threshold: TDS applies only if payments to a partner exceed ₹20,000 in a financial year. ✅ When to Deduct? At the time of credit to the partner’s account (including capital account), OR At the time of payment (cash, cheque, or any other mode)—whichever is earlier. *Exclusion:* Share of profit remains exempt from TDS under this section. *Example to Understand:* Quarterly Commission: ₹30,000 Annual Interest on Capital: ₹40,000 Total Payment for the Year: ₹1,70,000 Since this exceeds the ₹20,000 threshold, the firm must deduct TDS @10% on the full amount: TDS = ₹1,70,000 × 10% = ₹17,000 This new rule aims to boost tax transparency and ensure timely tax collection from partnership firms and LLPs.