Hi, I am starting a PG(paying guest) business, which works as follows:
I take a residential property on rent - say an apartment on rent on homeowner.
I furnish the apartment and with his consent, I rent it out to other people - say students or working people. I pay the agreed rent to the landlord and collect rent from the occupants.
For example. Let's say I take a 2bhk apartment on rent for 20k per month. I invested 100k in the apartment, buying all the necessary items such as fridge, tv, ac, furniture etc. I rent the two rooms to two individuals for 12.5k each.
I have multiple PGs running like this.
Now my questions are the following:
1. Will this business qualify under presumptive taxation scheme? For example, if I collect 20 lac total rent for the year, can I just show 20*6/100 or 20*8/100 as my income?
2. Will any transaction attract service tax?
3. What are the TDS implications? WIll I need to cut TDS? will the tenants that I rent the place out to? What are the exact TDS rules in such scenareos and where can I find them.
Thanks and regards
CAclubindia
