Gst on rentals

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

23 October 2017 Dear All,

We have got a few residential properties given on Leave & License basis. They all are on 2 names each.

We are planning to purchase a commercial property to give on Leave & License basis.
In case the commercial property does not cross Rs. 20 lakhs a year alone but counting the residential properties combined income does cross Rs. 20 lakhs in the year, will GST apply on the combined income or will the commercial rent be income be treated separately and have nothing to do with the residential income.

Also the properties are on 2 names each. Will the income as declared in income tax as 50% each party (name) be considered. E.g. If only from commercial income the rent is crossing Rs. 20 lakhs but divided in the 2 names and coming below Rs. 20 lakhs each, then will that be considered as GST not applicable or it will be considered as a whole for the first holder of the property.

Also if the first holder is a senior citizen 85 years of age, will there be any sort of relaxation in the GST if applicable as in the case of Income Tax.

Regards
Atish

RAJA P M

RAJA P M (Expert)

23 October 2017 First of the Residential Rental income is exempted under GST. So, no need any other Questions..... The Commercial Rental Income is Taxable under GST. But, it's not exceeding above 20lakhs then no need registration under GST. If it's exceed above 20lakhs then Registration is mandatory.... But, your above said way the income is divided into two parts Also it's less than ceiling limit (20 + 20) then no need registration for both hand.... Note: I replied as assume 50/50 share....

RAMESH KUMAR SINGLA

RAMESH KUMAR SINGLA (Expert)

23 October 2017 The income from supply of Renting Service is also a taxable income under GST law though exempted. As per Section 22 of the CGST Act, the aggregate turnover of all the taxable supplies has to be counted towards computation of aggregate turnover of Rs.20 lakhs. Therefore, if your total turnover from renting of residential property and from other commercial property together exceeds Rs. 20 lakhs, you need to get registered and file your returns accordingly.
Coming to your second question, in case your agreement with tenant, provides for bifurcation of the rent between co-owners, then the same would be considered as supply of renting service by both the co-owners and the tenant can pass on separate consideration to the co-owners. However, this may lead to complications with Income Tax Deptt .

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