A service provider of Renting of Immovable Property services has deducted the Property Tax paid from the taxable income of service tax. However, the tenent has separately reimbursed the property tax amount apart from the rent paid. Department says that, if such amount incurred by the service provider then only deduction is permissible. Other wise ST is payable on the amount received from the tenent treating the same as taxable income. Is that correct.
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IS THIS AMOUNT TAXABLE
Replies (3)
| Originally posted by : lakshmi | ||
 |
A service provider of Renting of Immovable Property services has deducted the Property Tax paid from the taxable income of service tax. However, the tenent has separately reimbursed the property tax amount apart from the rent paid. Department says that, if such amount incurred by the service provider then only deduction is permissible. Other wise ST is payable on the amount received from the tenent treating the same as taxable income. Is that correct. |
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Yes it is correct.
Yes, what department is saying is correct.
The amount whether recovered from the tenant or not has no bearing on the taxability. The deduction for the property tax is allowed under Not 24/2007 where the only condition for deduction is payment. By whom is not a subject matter of debate.
Billing :
Rent 1000
ST on Rent less PT 200
10.3% on 800 80.24
Total 1080.24.
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