Government of India

Ministry of Finance
(Department of Revenue)
(Central Board of Direct Taxes)

Notification No. 22/2025

Dated: March 27, 2025
G.S.R. 195(E)

Background (Before the Notification)

Before this amendment, the Income-tax Rules, 1962 did not explicitly include Section 194T under TDS provisions. The tax deduction mechanism for payments such as salary, remuneration, commission, bonus, or interest to a partner of a firm was not separately defined under Forms 26Q and 27Q.

Key Amendments Introduced by the Notification

The Central Board of Direct Taxes (CBDT) has issued this notification under Section 295 read with Section 194T of the Income-tax Act, 1961, making the following changes:

1. Introduction of Section 194T:

   • A new provision, Section 194T, has been added to cover TDS on payments to partners of firms, including salary, remuneration, commission, bonus, or interest.

2. Modifications to Form 26Q (TDS on Domestic Payments):

   • The heading of Form No. 26Q now includes 194T alongside existing TDS sections.

   • In the Annexure, Note No. 16, a new row is added to include 194T for payments made to partners of firms.

3. Modifications to Form 27Q (TDS on Payments to Non-Residents):

   • The heading of Form No. 27Q now includes 194T along with existing provisions.

   • Under Note No. 13, a new row for 194T has been added, covering salary, remuneration, commission, bonus, or interest paid to a partner of a firm.

Implications (After the Notification)

• Expanded TDS Scope:

  • Payments to partners of firms are now subject to TDS under Section 194T.

  • This amendment aligns partner payments with other professional and salary-based deductions.

• Increased Compliance Requirements:

  • Firms will now need to deduct and report TDS on partner payments using Forms 26Q and 27Q.

• Immediate Implementation:

  • The rules are effective from the date of publication in the Official Gazette.

Original Notification Text

MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICATION
New Delhi, the 27th March, 2025

G.S.R. 195(E).— In exercise of the powers conferred by section 295 read with section 194T of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:

1. (1) These rules may be called the Income-tax (Seventh Amendment) Rules, 2025.
   (2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Income-tax Rules, 1962, in Appendix II,––

(A) In Form No. 26Q, ––

1. In the heading, after the figures and letter “194S”, the figures and letter “194T” shall be inserted.

2. In the Annexure, Note No. 16, in the Table at the end, the following shall be inserted:

“194T Payment of salary, remuneration, commission, bonus, or interest to a partner of a firm
94T”

(B) In Form No. 27Q,––

1. In the heading, after the figures and letter “194N”, the figures and letter “194T” shall be inserted.

2. In the Annexure, Note No. 13, in the Table, the existing row:

   “195 Other sums payable to a non-resident 195”,

   Shall be substituted by:

   “194T Payment of salary, remuneration, commission, bonus, or interest to a partner of a firm
   94T

   195 Other sums payable to a non-resident 195”

[No. 22/2025/F. No. 370142/08/2025-TPL]
ASHISH KUMAR AGRAWAL, Dy. Secy.

Note: The principal rules were published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (ii), vide notification number S.O. 969 (E), dated the 27th March, 1962, and were last amended vide notification number G.S.R 193 (E), dated the 25th March, 2025.