Service tax - minors / allowances

This query is : Resolved

Khalid (Querist)
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19 May 2012 How are minors treated if they are part owners in a building for Service tax on Rental income? Do they get treated as seperate individuals with the 10 Lakhs exemption?

2. What are the exemptions allowed on Svc Tax on rentals - is the exemption on the first 10 Lakhs only for the first year or will it be given every year?

Pls clarify. Thanks

CA Pradeep Sharma

CA Pradeep Sharma (Expert)
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19 May 2012 No, minor is not treated as separate individual for 10 lakh exemption also 10 lakh exemption depend on your last year revenue.........

Khalid

Khalid (Querist)
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21 May 2012 What can I do to obtain the 10 Lakh exemption for four Minor owners int he building? Pls help clarify.

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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24 July 2025 Here’s the clarification on your queries regarding service tax on rental income involving minors:

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### 1. **Are minors treated as separate individuals for the ₹10 lakh exemption?**

* **No**, minors are **not treated as separate individuals** for the purpose of service tax exemption.
* Even if minors are co-owners, the exemption limit of ₹10 lakhs is applied collectively to the owner(s), **not individually for minors**.
* So, you **cannot claim ₹10 lakh exemption per minor owner separately**.

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### 2. **Is the ₹10 lakh exemption on rental income service tax a one-time or yearly exemption?**

* The ₹10 lakh exemption is **available every financial year**.
* If your aggregate taxable rental income in a financial year does not exceed ₹10 lakhs, you are exempt from service tax for that year.
* The exemption is **not limited to the first year only**, it applies every year based on turnover.

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### 3. **How to obtain exemption if building is owned by minors?**

* Since minors are not treated as separate taxable persons, you cannot split the exemption among them.
* The exemption is available to the **aggregate turnover of the taxable entity (owner)**.
* To utilize separate exemptions, the building or property should ideally be owned by different legal entities (e.g., separate individuals or companies), which is not possible with minors unless a guardian holds ownership on their behalf as a separate legal entity.

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**Summary Table:**

| Query | Answer |
| --------------------------------------- | -------------------------------------------- |
| Minor treated as separate individual? | No, minors are aggregated with other owners |
| ₹10 lakh exemption available per minor? | No, exemption applies collectively to owners |
| Exemption validity | Every financial year based on turnover |

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If you want, I can help you draft a strategy or explore legal ways to maximize exemption benefits for multiple owners. Would you like that?

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