Renting of immovable property services

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Querist : Anonymous

Querist : Anonymous (Querist)

04 February 2016 Dear Sir,

We one running a Charitable Trust. It is registered u/s 12A of the IT Act 1961. Trust income is utilised for the Charitable causes and object of the Trust. No exemption u/s 80G. This year, in March 2016 the rental income from the Commercial properties comes to Rs.10,41,000/-. It is crosses Rs.10 lakh, the threshold exemption limit of Service Tax. Trust has paid property tax for the commercial properties around Rs.57,500/-. If the said municipal tax Rs.57,600/- is deducted the net rent amount comes (10,41,000 - 57,600) Rs.9,56,400/- (i.e) below Rs.10 lakh. So please give us your guidance for the following:
(i) Shall the Service Tax Registration be done for our Trust in March 2016?
(ii) After deduction of property tax the threshold limit comes below 10 lakh. In such circumstances, shall service Tax Registration be done?.
(iii) The Trust has property income on 8.70 lakh in last year 2014-15.

so please advise.

Thanks & Regards,
C. DURAIRAJ
Karaikudi

praveen

praveen (Expert)

04 February 2016 The threshold limit though is Rs.10 Lakhs you need register urself under the service tax laws as soon as your turnover reaches Rs.9 Lakhs. In the present circumstances the Service tax willl not be applicable. However, the property tax paid by the trust cannot be claimed as deduction if it is not collected seperately from the tenant. There needs to be a bill that states you have collected property tax from the client. My suggestion would be to register the trust under service tax.

Querist : Anonymous

Querist : Anonymous (Querist)

05 February 2016 Sir,

Thanks u very much for your guidance to register our Trust for Service Tax given by export Mr. Praven.

I will do it immediately. Besides I would require one more guidance from you as to payment of Service Tax.
(i) Shall the Trust pay Service Tax @14.5% on Rs.41,000 (i.e.) after availing the exemption of Rs.10 lakh is it to be paid on entire sum of Rs.10,41,000/- which works out to Rs.1,50,945/-.

Please advise.

Thanks & Regards,
C. DURAIRAJ
Karaikudi-630001.

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