House tax and service tax on renting immovable property

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Anant Gupta (Querist)

22 September 2013 I have rented my property to bank for Rs 95000.00 per month on 15 September 2013. The House Tax for the same is 20,000.00 per year. How much service tax should I charge the bank and from which date. I have no other rental income.

CA Suresh Jain

CA Suresh Jain (Expert)

23 September 2013 if your total taxable service in previous year was less than Rs. 10 lakh then and there is no other service being provided by you in this year then the value of service this year shall be less then Rs. 10 Lakh which makes you eligible for exemption from service tax. You are not even liable for service tax as your total taxable turnover will be less than Rs. 9 lakh.

Next year also you shall be liable for service tax only after your services crosses value of Rs. 10 lakh provided there is no change to the exemption notification i next budget.

Value of service (Rental) per month shall be Monthly rent minus 20000 (property tax) divided by 12.

disclaimer- all answers are given as per the facts narrated by you. Answer may differ after study of full facts/statements/agreements etc. involved in the case

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Anant Gupta

Anant Gupta (Querist)

23 September 2013 if in case my total rental income this year ending 31st March 2014 is 9,45,000.00 and next year ending 31st March 2015 would be 14,40,000.00 then when do I have to apply for service tax. When will tenant start paying me service tax. And how much service tax is to be charged

CA Suresh Jain

CA Suresh Jain (Expert)

23 September 2013 It seems that you are receiving rent from more than one property. Please deduct from the rent proportionate property tax of all buildings.
In this year since your taxable rental is less then the exemption limit, you are not liable to service tax.

Next year you will be liable to pay service tax after November on the amount exceeding 10 lakh.
Exact calculations can be given only if you inform property-wise rental and house/property tax payable

Anant Gupta

Anant Gupta (Querist)

24 September 2013 Rent from Residential Property : Rs. 15000/- from 1st April 2013 till September 30th 2013. House Tax Rs. 1800.00 per year

Rent from Chemist Shop : Rs. 25000/- from April 2013
House tax Rs. 1050.00 per year

Rent from Bank : Rs. 95000/- from October 2013 onwards House tax Rs. 20000.00 per year

Please specify Service Tax liability for Year ending March 2014 and March 2015. If my rental incode is more than 9 lakhs for 2013-2014 Will need to apply service tax number in March 2014 and in that case will I get Rs. 10 lakhs rebate of service tax for March 2015

If I continue to receive Rs. 15000/- from Residential propery will it change my tax liability

CA Suresh Jain

CA Suresh Jain (Expert)

29 September 2013 1 rent from residential property is not taxable
2 rent from Bank from 01.10.2013 to 31.03.2013 @ Rs. 95000 per month plus Rs. 25000 from chemist minus property tax proportionate aggregates to Rs Rs. 858950 below taxable limit and therefore need not pay tax and take registration also

3. In the year 2014-15 the following will be the position :-

a. Taxable rent per month from chemist 25000-87.50=24,912.50 and
b. taxable rent per month from bank would be Rs. 93,333.33

The exemption is available upto Rs. 10,00,000 i.e. upto November 2014 you need not pay any service tax. but apply for registration in the month of October 14.
In the month of December you shall be required to pay service tax on Rs. 54033.00 which you may charge proportionately from chemist and bank. Thereafter you shall be required to pay service tax on the monthly taxable amount of rent as mentioned above.
disclaimer- all answers are given as per the facts narrated by you. Answer may differ after study of full facts/statements/agreements etc. involved in the case

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