TDS Forms 26Q and 27Q Updated: What are the Key Changes?

The Central Board of Direct Taxes (CBDT) has introduced significant updates to TDS reporting by implementing Section 194T. This new provision mandates the separate reporting of payments made by partnership firms to their partners. To accommodate this change, the CBDT has amended TDS Forms 26Q and 27Q. This article provides a detailed breakdown of the key changes and their implications.

Key Highlights of the CBDT Notification

• Section 194T introduced to ensure proper TDS reporting on payments made to partners of a firm.
• Updates made to Forms 26Q and 27Q to include reporting under Section 194T.
• Changes effective from the date of publication in the Official Gazette.
• Firms must now report salary, remuneration, commission, bonus, and interest payments to partners separately in the respective forms.

What is Section 194T?

Section 194T requires partnership firms to deduct and report TDS on specific payments made to their partners. These payments include:

• Salary
• Remuneration
• Commission
• Bonus
• Interest

The provision ensures that these transactions are separately recorded in TDS returns, preventing misreporting and enhancing compliance.

Related Read: Major Tax Changes for Partnership forms and LLPs from 1st April 2025

What are the Changes in TDS Forms 26Q & 27Q?

The CBDT has updated Forms 26Q and 27Q to accommodate Section 194T, ensuring accurate reporting of payments to partners.

Form 26Q 

• Purpose: Form 26Q is used to report TDS on non-salary payments made to resident individuals and entities.
• Changes:
• The heading now includes Section 194T.
• In the annexure (Note 16), a new row has been added for payments covered under Section 194T.

Form 27Q 

• Purpose: Form 27Q is used to report TDS on non-salary payments made to non-resident individuals and entities.
• Changes:
• Section 194T has been added after Section 194N in the heading.
• In Note 13, a new row has been introduced to record payments made to a partner under Section 194T.

Updated Table for TDS Forms 26Q & 27Q

CBDT Notification regarding Section 194T Amendment in Form 26Q and 27Q

Below, we have attached the official PDF regarding the Section 194T amendment in Form 26Q and 27Q.

Key Takeaways:

• Taxpayers must understand and comply with the new reporting requirements under Section 194T.
• Partnership firms need to separately report payments made to partners, such as salary, commission, bonus, and interest, in Forms 26Q and 27Q.
• Update accounting systems and software to include Section 194T in TDS reporting.
• Ensure all payments to partners are correctly reported to avoid penalties or scrutiny.

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