Rent immovable properties

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 January 2013 Respected Sir / Mam

If a land lord give his premises to an institute , who provide teaching facility /courses for entrance exam of Medical or Non-medical . Whether the land lord is liable to registered himself under service tax “ Rent on immovable properties” . His annual rental income above 10 Lacs and building is commercial.

Jinesh Bhagdev

Jinesh Bhagdev (Expert)
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08 January 2013 Yes.. If the income crosses 10 lakhs, the landlord will be required to register under service tax, collect appropriate service tax and deposit the same.

Querist : Anonymous

Querist : Anonymous (Querist)

11 January 2013 Government of India
Ministry of Finance
(Department of Revenue)
Notification No. 25/2012-Service Tax
New Delhi, the 20th June, 2012
G.S.R……(E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the said Act) and in supersession of notification number 12/2012- Service Tax, dated the 17th March, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) videnumber G.S.R. 210 (E), dated the 17th March, 2012, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the following taxable services from the whole of the service tax leviable thereon under section 66B of the said Act, namely:-

9. Services provided to or by an educational institution in respect of education exempted from service tax, by way of,-
(a) auxiliary educational services; or
(b) renting of immovable property;

http://www.servicetax.gov.in/notifications/notfns-2012/st25-2012.htm

see the point no. 9 B

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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21 July 2025 Key points on Service Tax & Rent on Immovable Property:
Threshold for Service Tax Registration:

A landlord with annual rental income above Rs 10 lakhs is generally required to register for service tax, collect it from the tenant, and deposit with the government.

Exception for Educational Institutions:

As per Notification No. 25/2012-Service Tax (20th June 2012), renting of immovable property to educational institutions providing exempted education services is itself exempt from service tax.

Clause 9(b) of the notification states:

“Services provided to or by an educational institution in respect of education exempted from service tax, by way of renting of immovable property” are exempted.

Implication for your case:

If the institute providing medical or non-medical entrance coaching qualifies as an educational institution exempt from service tax, then the rent you receive will be exempt from service tax, regardless of the Rs 10 lakh threshold.

So, landlord need NOT register or collect service tax on rent received from such an institution.

Summary table:
Situation Service Tax on Rent
Rent to commercial tenant (non-educational) >10L Service tax applicable, registration needed
Rent to educational institute exempt from service tax Exempt from service tax, no registration needed

Important:
Confirm whether the institute is classified as exempt educational institution under service tax laws.

If yes, no service tax on rent.

Otherwise, if institute is commercial or not exempt, and rent exceeds Rs 10 lakh annually, service tax applies.

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