Service tax

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bhoomika chawla

asa

28 Points Posted on 18 July 2013

Wheher service tax should be charged on rental income from immovable property let out to an INDIVIDUAL for commercial purpose ?

Replies (2)

CA vinod

Chartered Accountant

208 Points Posted on 18 July 2013

Yes, service tax is pplicable if the property letout for commercial purpose even the tenent is an Individual.

Renting of Immovable property is subject to service tax except in the following cases :

1. Renting of vacant land, with or without a structure incidental to its use, relating to agriculture.

2. Renting of residential dwelling for use as residence

3. Renting out of any property by the Reserve Bank of India

4. renting out of any property by a Government or a local authority to a non-business entity

However the following exemptions are allowed:

1. Threshold level exemption up to Rs. 10 lakh.

2. Renting of precincts of a religious place meant for general public.

3. Renting of a hotel, inn, guest house, club, campsite or other commercial places meant for residential or lodging

purposes, having declared tariff of a room below rupees one thousand per day or equivalent.

4. Renting to an exempt educational institution

bhoomika chawla

asa

28 Points Posted on 18 July 2013

Sir , what if we have wrongly charged service tax on rental income of a RESIDENTIAL house property and deposited the same with the service tax department ? Whether:

1) We can claim this amount of service tax wrongly deposited by us &

2) whether we will be liable to pay income tax on the entire rental income(inclusive of service tax). For Example ,monthly rent = Rs. 11236 ( inclusive of service tax), we wrongly deposited Rs. 1236 as service tax . Now my query is whether income tax will be charged on Rs. 11236 or Rs. 10000?