Tds on rents
This query is : Resolved
sunil marata
(Querist)
21 October 2015
Sir/Madam. . I want to know what is the Slab on rent paid by bank to its employees to deduct TDS.
ANKIT AGARWAL
(Expert)
23 October 2015
Please give more information.
27 July 2025
Hey! Regarding **TDS on rent paid by a bank to its employees**, here’s what applies:
---
### TDS on Rent Paid by Bank to Employees
* When a bank pays rent to its employees (like house rent allowance or actual rent), **TDS provisions under Section 194I apply if the rent exceeds Rs. 2,40,000 per annum** (Rs. 20,000 per month).
* If rent paid **exceeds Rs. 2,40,000 in a financial year**, the bank must deduct **TDS @ 10%** on the rent amount exceeding this limit.
* If rent paid is **below Rs. 2,40,000 per year**, no TDS deduction is required.
---
### Summary:
| Rent Paid per Year | TDS Requirement |
| ------------------ | ------------------------------ |
| Up to Rs. 2,40,000 | No TDS deduction |
| Above Rs. 2,40,000 | Deduct TDS @ 10% on total rent |
---
### Additional Points:
* TDS should be deducted **at the time of credit or payment, whichever is earlier**.
* The employee’s PAN should be taken; otherwise, TDS @ 20% applies.
---
Let me know if you want a sample TDS calculation or related forms for the bank!
---
### TDS on Rent Paid by Bank to Employees
* When a bank pays rent to its employees (like house rent allowance or actual rent), **TDS provisions under Section 194I apply if the rent exceeds Rs. 2,40,000 per annum** (Rs. 20,000 per month).
* If rent paid **exceeds Rs. 2,40,000 in a financial year**, the bank must deduct **TDS @ 10%** on the rent amount exceeding this limit.
* If rent paid is **below Rs. 2,40,000 per year**, no TDS deduction is required.
---
### Summary:
| Rent Paid per Year | TDS Requirement |
| ------------------ | ------------------------------ |
| Up to Rs. 2,40,000 | No TDS deduction |
| Above Rs. 2,40,000 | Deduct TDS @ 10% on total rent |
---
### Additional Points:
* TDS should be deducted **at the time of credit or payment, whichever is earlier**.
* The employee’s PAN should be taken; otherwise, TDS @ 20% applies.
---
Let me know if you want a sample TDS calculation or related forms for the bank!
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