17/05/2026
“Earn. Deduct. Distribute. Deduct again.”
That’s the new story many professional firms may relate to under Section 194T of Income Tax Act.
A firm receives payments after TDS.
Partner remuneration/interest gets credited.
Another TDS kicks in.
Legally correct? Absolutely.
Practically comfortable? That’s where the debate begins.
Because for growing firms and professional partnerships, the biggest challenge is rarely profitability.
It’s liquidity.
Money locked in refunds for months means slower hiring, delayed expansion, cautious spending, and tighter operations.
And the irony?
In many cases, the final tax liability may not even justify the cash blockage.
Yes, lower/NIL deduction provisions are available.
But one thing is clear:
Modern taxation is no longer just about paying taxes.
It’s about managing cash flow, compliance strategy, and survival efficiency.
The law evolves.
So must professional firms.