Renting of immovable property

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Bhawesh (Querist)
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01 February 2012 Renting of Immovable property is taxable u/s 65(105)(zzzz), i.e. as a service provided.

But the same thing can also be taxed as income from house property. I didnt understand the difference due to which it has been taxed as a service.

Can somebody help me out please.

CA Nikhil Jhanwar

CA Nikhil Jhanwar (Expert)
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02 February 2012 The main difference is in nature of taxes

Income tax is direct tax and Service tax is indirect tax......You will appreciate the fact it is not only in case of renting......This taxing under Both laws happens in every case.

IF any taxable service is provided apart from being taxable under Service tax law. profit from service provided will also be taxable under Business Head as Income tax....

Further, Main purpose of ST on renting is to cover commercial property only residential property are not covered in the purview of ST

In case of income tax....income from house property embraces only residential property...

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NILESHKUMAR

NILESHKUMAR (Expert)
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02 February 2012 The term immovable property has not been fully defined in Section 65(105) (zzzz). As per the existing provisions of service tax and definition of immovable property if you lease whole business along with emenities such as land, building plant and machinery with all amenities it not taxable. for that a combined lease rent of of the services has to be entered between lessor and lessee. As per section 3(26) of GeneralClause Act, Immovable property . if services is transferred by conveyance , the plant and machniery will be treated as immovable, which is not there in your case.
Thanks
NILESHKUMAR
B.Com, LLM, ACWA,MBA(Finance)
Advocates and COnsultants
Central Excise, Customs , Service Tax, Export-Import, FOREX , FTP

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