Service tax on renting of immovable property service

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

17 January 2015 Dear Sir,

how to entry in tally paid to service tax on renting of immovable property with ledger and group.

CA PRIYUL SHAH

CA PRIYUL SHAH (Expert)
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17 January 2015 can you reform your question?
I couldn't understand whether you are asking to pass entry of service tax paid to government for renting of immovable property or on receipt of rent with service tax or you have paid rent with service tax.

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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24 July 2025 For recording **Service Tax paid on Renting of Immovable Property** in Tally, here’s a simple and clear way to do it:

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### Step 1: Create Ledgers

1. **Service Tax Payable**

* Under Group: **Duties & Taxes**
* Nature: Liability ledger (because this is the tax you owe to the government)

2. **Bank or Cash**

* Under Group: **Bank Accounts** or **Cash-in-hand** (depending on mode of payment)

3. **Rent Expense / Rent Income**

* Under Group: **Indirect Expenses** (if you are paying rent)
OR
* Under Group: **Indirect Income** (if you are receiving rent)

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### Step 2: Record the Payment Entry for Service Tax

If you are **paying service tax on rental income received** (i.e., you are the landlord paying service tax to the government):

* **Date:** Date of payment
* **Particulars:**

* Debit: **Service Tax Payable** (Duties & Taxes) — with the amount of service tax paid
* Credit: **Bank/Cash** — with the same amount

This entry clears your service tax liability by paying the government.

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### Step 3: Record Service Tax on Invoice (Optional)

If you are **charging service tax to tenant** on rent and collecting it:

* On invoice creation, include:

* Rent Amount
* Service Tax (as a separate tax component)

* This way, your **Service Tax Payable** ledger will get credited automatically, showing the tax liability.

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### Summary for payment:

| Ledger Name | Group | Nature | Entry Type | Amount |
| ------------------- | -------------------- | --------- | ---------------- | -------- |
| Service Tax Payable | Duties & Taxes | Liability | Debit (Payment) | Rs. XXXX |
| Bank/Cash | Bank or Cash-in-Hand | Asset | Credit (Payment) | Rs. XXXX |

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**Note:**

* If you want to track service tax paid as an **expense** (for internal reporting), you may also create an **Indirect Expenses** ledger called "Service Tax Expense" and debit it accordingly. But technically, service tax is a liability, not an expense.

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If you want, I can guide you step-by-step to create the ledger in Tally or even draft the voucher entry. Would you like that?

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