I am writing to share a set of compliance requirement and a detailed checklist that have been compiled to assist in implementing the obligations under Section 194T of the Income‑tax Act, 1961 (payments by partnership firms/LLPs to partners).

Attached documents include:

1.  An Excel workbook template containing:

  • Partner-Master sheet (partner codes, PAN/Aadhaar, %-share etc)
  • Payment Ledger (with payment/credit date, nature of payment, cumulative tracking, threshold-flag, TDS deduction, net paid etc)
  • TDS Deposit & Return Tracker
  • Reconciliation & Compliance Check sheet

2.  A draft Policy Document for internal adoption (Policy for Compliance with Section 194T).

Please review the materials, and I would appreciate your comments on:

  • Whether the structure aligns with the firm’s accounting practices and partnership/LLP deed.
  • Whether the policy wording needs any amendments specific to our entity (e.g., difference in partner classification, LLP vs. firm).
  • Any additional fields or controls you believe we should include in the template to suit audit readiness.
  • Timing and transition plan for implementation (from FY 2025-26, given Section 194T will apply from payments credited/paid from 01 April 2025).

Suggested next steps:

  • Circulate the policy draft among key stakeholders (partners, finance/accounting team) for comments.
  • Finalise the template structure, embed formulas (threshold check, cumulative sum), and perform a pilot run for current/future payments.
  • Set up a meeting to discuss and agree how tracking and TDS deductions under Section 194T will be operationalised (responsibilities, timelines, reporting).
  • Update the partnership/LLP deed if required to clearly delineate “profit share” (exempt) vs “remuneration/commission/interest/bonus” (subject to TDS).
  • Ensure system readiness—TAN registration (if needed), partner details (PAN/Aadhaar), internal ledger modifications, etc. 

I am quite confident that the detailed analysis attached herewith shall be useful for all of my professional colleagues. 

Looking forward for your valuable inputs on the subject.

With warms regards

CA. Atul Agrawal