Service tax on interest free security deposit
This query is : Resolved
07 January 2012
Most of the Landlords receive interest free security deposit from tenants. whether notional interest can be taxed on that interest free security deposit under service tax law. Please refer relevant case law.
07 January 2012
Didnt find any case law but no service tax is leviable as it is on any interest charged and hence no service tax could be levied on notional interest.
Also in ordinary rent circumstances where deposit amount is as per general trend and not abnormal no interest can be levied as per Income tax laws also as decided in case of CIT v/s J. K. Investors by supreme court.
Also in ordinary rent circumstances where deposit amount is as per general trend and not abnormal no interest can be levied as per Income tax laws also as decided in case of CIT v/s J. K. Investors by supreme court.
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