1st year rental income below 10 lacs service tax is to be pd

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NAGARAJAN RAJAGOPALAN

PROFESSIONAL ACCOUNTANT

54 Points Joined June 2009

I have inadvertently registered with Service Tax dept during Jan 15, estimating my Gross Rental Income (Basic Amount with out Service tax) will exceed - Rs. 10 Lacs by March 2015.

But actually when I now calculate, the rent (Basic Amt) will not cross Rs.9.50 Lacs, till March 15 (including March 15 Rent Receivable in April 15).

Till now I have not charged even a single paise towards service Tax to my tenant. . This is my first year of operation.

Since, now I have registered with Service Tax is it necessary to charge ST on the Rent so far collected & to be paid even if it is below - Rs. 10 Lacs (or) Can I file this year Nil return.

My tenant is also not willing to pay the service tax for this year, because the total amount of rent of this year will not cross Rs.10 Lacs.

Pl guide me

Replies (2)

Gagan Deep Singh

CHARTERED ACCOUNTANT

1190 Points Joined October 2012

Since this is your first year of operation you dont have to pay service tax till amount recieved upto Rs 10 lac.

Also you can avail exemption upto Rs 10 lac in the next FY because as per notification no.33/2012 if turnover during the perceeding FY(2014-15) does not exceed Rs 10 lac then assesee can avail exemption upto Rs 10 lac in current FY(2015-16).

Vishal Goel

Chartered Accountant

1693 Points Joined April 2014

Service tax is only mandatory liable to paid if the total value of services provided by the service provider exceeds the threshold limit of Rs 10 lakhs p.a. if the total value of all services provided by the service provider is less than Rs 10 lakh p.a. ,then service provider can claim benefit of exemptoin & He will not be required to pay service tax on such service.