Service tax registration

This query is : Resolved

ARTHI (Querist)
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02 June 2015 Dear Friends / Experts,

Please guide me on the following, IF POSSIBLE:

An Individual has let out his property to various Tenants and earned Total Rental Income of Rs.11 Lacs for FY 2014-15.

- Rental Income Rs.400000/- by way of domestic use.

- Rental Income Rs.700000/- by way of commercial use.

Query

Whether the requirement of Service Tax Registration shall apply to the said Individual, as the total rental income exceeded Rs.10 Lacs for FY 2014-15.

Your reply, please..............

Thanks in advance for possible replies from all concerned.

ARTHI

ARTHI (Querist)
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03 June 2015 Can someone look into this, please?

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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25 July 2025 Hey! Here’s a clear answer to your query about **Service Tax registration on rental income from property**:

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### **Is Service Tax Registration Required if Rental Income exceeds ₹10 lakhs?**

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### 1. **Service Tax Applicability on Rental Income**

* Under **Service Tax law (pre-GST era)**, **renting of immovable property services** were taxable if they were for **commercial purposes** only.
* **Rentals for residential/domestic use were exempt from Service Tax**.

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### 2. **Threshold Limit**

* The exemption threshold for **service tax registration and payment** was **₹10 lakh turnover per financial year** on taxable services.
* **Only the commercial rental income is considered for service tax purposes**, not the domestic rental income.

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### 3. **Your Client’s Case**

| Type of Rental Income | Amount (Rs.) | Taxable for Service Tax? |
| ------------------------ | ------------ | ------------------------ |
| Domestic Rental Income | 4,00,000 | **No (exempt)** |
| Commercial Rental Income | 7,00,000 | **Yes (taxable)** |

* Total **taxable rental income = ₹7,00,000**, which is **below ₹10 lakh threshold**.

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### 4. **Conclusion**

* Since **commercial rental income (₹7,00,000) is less than ₹10 lakh**, the individual **is not required to register for Service Tax** or pay Service Tax on the rental income.
* **Domestic rental income is exempt anyway**.

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### 5. **Additional Notes**

* If the **commercial rental income exceeds ₹10 lakh** in any financial year, then registration and payment of Service Tax becomes mandatory.
* After GST rollout (from July 2017), Service Tax on rent has been subsumed under GST and rules are different.

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### **Summary Table**

| Total Commercial Rental Income | Service Tax Registration Required? |
| ------------------------------ | ---------------------------------- |
| Less than ₹10 lakh | No |
| More than ₹10 lakh | Yes |

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If you want, I can also help with sample documents or a checklist for service tax registration when the threshold is crossed.

Would that help?

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