Service Tax on Rented property

This query is : Resolved

Mohammed Salman (Querist)
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31 October 2016 We four brothers owns a building which is rented out for commercial purpose. Total amount received monthly by way of rent is Rs 2 Lakhs in which each brother gets 50k. So i would like to know whether service tax is applicable on the said rent ?

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
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31 October 2016 If rent received individual name ,and agreement made 4 brothers, than service tax not applicable . ST applicable if Threshold limit Cross 10 lakh. Since you are receiving rent individually and not Cross 6 lakhs.

Thrissurkkaran Ishtan

Thrissurkkaran Ishtan (Expert)
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31 October 2016 Some additional things to be paid attention to:
1. The building should be in equal ownership. For example, if the one brother has a higher share, say 60% of the building, then he will become subject to ST
2. The agreement has to be properly drafted showing ownership of all brothers.
3. If possible, split the rent payment into individual names through separate cheques
4. Income tax will be payable on rental income subject to tax computation.

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