CA Final/Inter Fast track classes available for May 20 attempt. Call: 1800-3000-0505

Query on income tax & service tax


Raghu (MBA)     10 March 2015

Raghu
MBA 
 28 points

| My Other Post

Me & my mother jointly purchased a site in Bangalore from BDA recently. Now we are going ahead with the construction of the property. This property might fetch a rental income of Rs. 1 Lakh per month. I am a salaried person with income of around 20 lakhs per year. My mother is a pensioner with a monthly pension of around 2.4 lakhs per year. Now my queries are :

1) Since I am already under 30% tax bracket, can I show all the income from rental property to my mother IT returns?

2) Since the rental income is more than 10 lakhs per year, we will need to pay service tax also ?

3) If yes, then by splitting this rental income equally between each of us, will we be able to save on service tax ?

4) We will also get around 10 lakhs as advance by the tenants. Are there any taxes involved for this advance amount also ?

5) Is there any limit on the advance amount ?

Please let me know.

avater

Poornima Madhava (ACMA)     10 March 2015

Poornima Madhava
ACMA 
 513 likes  5579 points

View Profile | My Other Post

If the property is let out for residential purpose (and not for commercial purpose), there is no service tax applicable, in which case you don't need to register or pay service tax.

As far as Q1 is concerned, I feel income forms part of co-owner in proportion to ownership. However, I shall also await advices from experts on this point

 

Lakshman (Director)     11 March 2015

Lakshman
Director 
 30 points

View Profile | My Other Post

Originally posted by : Raghu
Me & my mother jointly purchased a site in Bangalore from BDA recently. Now we are going ahead with the construction of the property. This property might fetch a rental income of Rs. 1 Lakh per month. I am a salaried person with income of around 20 lakhs per year. My mother is a pensioner with a monthly pension of around 2.4 lakhs per year. Now my queries are :

1) Since I am already under 30% tax bracket, can I show all the income from rental property to my mother IT returns?

2) Since the rental income is more than 10 lakhs per year, we will need to pay service tax also ?

3) If yes, then by splitting this rental income equally between each of us, will we be able to save on service tax ?

4) We will also get around 10 lakhs as advance by the tenants. Are there any taxes involved for this advance amount also ?

5) Is there any limit on the advance amount ?

Please let me know.

HI,

   We are into construction activity and if you are interested you can us the work and we will complete the Project with good quality of work. 

lakshmansgn @ gmail.com

Msg me the your mail id and we will send the photos of our previous construction.


Leave a reply

Your are not logged in . Please login to post replies

Click here to Login / Register  



Popular Discussion


view more »