Dear All,
I am planning to start renting of DVD online. A customer has to pay a refundable deposit and usage rent for the dvd. Will service tax be charged on rent income? Will there be any tax on security deposit? for eg: a customer rents a dvd by paying 150online. this includes 100security deposit whcih is refundable on demand and rent of50. please elaberate on the tax treatment for the same.
Thanks
Service Tax Shall Be Paid on Rs. 50/- Only...
Service Tax shall be applicable only when your turnover goes above Rs. 10 lakhs.
Regards,
Devendra
service tax will not be payable on security deposit so serv. tax will be leviable only on Rs.50/-.
But service tax shall be liable to pay only when gross turnover is more than 10 Lac.
REfundable deposits are not liable to service tax. Tax is onthe element of rent . You have basic exemption of Rs.10L
Service tax is applicable on the amount of rent only...
CAclubindia
