Service tax obligation on commercial rent

 

We pay a rent of 8.90 Lacs/year for our office.   This is our landlords only rental property.   Her other income is from salary and pensions.

Should she be charging us service tax?  She was advised that since her rental income is less than 9L or 10L, she is not obligated to register for service tax and collect it etc.  Is this correct advice?  Is the answer different if the property in question was a residential rental or commercial office rental?

If the rent increases to more than 9L or 10L/year , what will change in regards to her obligations.

Replies (7)

Renting of property is taxable in the hands of the landlord. Basic exemption of Rs.10L is available. Renting of residential houses is not taxable.

As the amount of rent will cross Rs. 10 lakh.. She will liable to pay service tax..

Thanks.


If she rents out a flat for residential purposes and the total of her commercial rental and the residential rental exceeds 10L per  year, is she then liable to collect and pay service tax or is only the commercial rental subject to service tax if it exceeds 10L/year?

Only commercial rent is to be reckoned for the limit of Rs.10L.

Is the limit for registration as a service provider still 9Lacs.. i.e if her commercial rental income is say 9.5 Lacs per year, then she must still register as a service provider and file service tax returns with NIL values because her taxable service base exceeds 9Lacs/year.  I was not able to find the document that describes the limits for registration as a service provider.

Thank you again for your prompt responses.
 

Limit for registration is Rs.9 L . Here also only commercial rent is reckoned,.
 


we have paid rent for shoping complex Rs.6 Lacs per annum. But landlord request to pay the service to us due to he receiving rental income from others for  building rent at Rs.5 Lacs. It is correct one..?

Please guide me..

Thanks & Regards,

S.Dhakshin

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