13 June 2007
Minor having rental income of Rs. 20,000.00 per month. Its income clubed with father for Income tax purpose. While clubing rental income of father exceeds Rs.8.00 lacs p.a. Whether minor is liable to charge service tax and get registered with service tax
1)As per Service Tax Exemption Notification No. 4/2007, the Exemption Limit has been increased to Rs. 800000 and this exemption is applicable if the the Gross Services of the Service Tax Assessee in the preceding financial year is upto Rs. 800000.
2) Clubbing provisions are applicable only for Income Tax Act, 1961.
3) Provisions of Service Tax and Income Tax should not be mixed.
So, clubbing as per Income Tax Act has no relation with Service Tax and so, liability to pay service tax does not arise at all.
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