Hi All,
From this year I will be receiveing a rental income of 11000 from one of the commercial complexes in my name.
Let me whether this income attracts any service tax? If no what is the limit at which I need to register as a service provider & file my returns.
Regards,
Gopal
not at all
you does not provide any service for your tanent, so ti's not cover under the service tax,
it is charged on income from house property.
Hi Ajit,
Can you please help me with a similar query?
My mother and uncle are joint holders (registered in their names individually) of a commercial property with Rs. 14.4L p.a. as rent EACH.
The property tax paid is Rs. 1.5L EACH p.a. The tenant is running a sports lounge (bowling, snooker with dining facility).
1. The said property is jointly owned by my mother and uncle, registered in their names individually and rent received in both names as per rental agreement (14.4l pa to be received by my mother and 14.4l pa to be received by my uncle).
2. The rental income started from February 2012. For FY 2011-12 rental income received = 1.8L each by my mother and uncle.
3. As per some of the forums, if rental income has not crossed 10L in previous year, in current FY, we are entitled to an exemption up to Rs. 10L rental income and Service tax to be applicable above Rs. 10L income only. Is this applicable in our case?
4. Please let me know the procedure for applying for PAN card on the basis of "Associations of persons", Service Tax RC and how and when to pay Service Tax (rental income is Rs. 1.2lacs per month individually for my mother and uncle).
Please advise on the service tax liability and also the procedure to pay the Service tax. This is the first time anyone in our family is paying Service Tax on rent and have no clue what all needs to be done for paying it.
Dear All
I agree with Mr. Ajit.
Regards
HS Negi
1) First rental income received in the year 2011-12 or Rs. 1.8 Lacs each. It is below the exemption limit of Rs. 10 lacs, hence it is exempted from Service Tax.
2) The Small Service Providers exemption limit of Rs. 10 lacs each available to these joint owners.
3) The Co-owners are individually lible to pay service tax on rental income once it reaches 10 lacs and individual co-owners can enjoy exemption limit of Rs. 10 lacs per annum.
4) The Co-owners individually apply for PAN ( if PAN is not available) and after getting PAN apply for Service Tax Registration by visiting www.aces.gov.in. You can file online application and after successful completion of online application submit to the dept. the hardcopy of applicaiton duly signed and supporting ID proof and Address proof. Within 7 to 15 days dept will allot Service Tax Registration number and Certificate.
The taxable value is to be arrived at after deducting the property tax. On that ST is chareable after 10 lakhs.
Dear Sunil and Madhukar,
Thank you for your prompt response and assistance in my query.
I do have one final query - When do I need to apply for Service Tax registration and certificate.
If I understand correctly, I need to apply when the rent crosses 9 lakhs but to be paid above 10 lakhs only.
If the above statement is correct, since there is a provision of deducting Property tax from the rent received, do I need to apply for Service Tax regn and certificate after the taxable value crosses 9 lakhs (after deducting property tax paid)?
service tax is applicable only if rent received from commercial immovable propeety and the thredhold limit is 10 lacs. if u earn Rs. 10 lacs and above rent per year then only u will have to pay service tax. It is better to mention a clause in the agreemnt that in future whenever service tax is applicable on landlord, it will be collected from tenant.
Dear Abhinav,
As per Notification No.29/2012-ST dated 20.06.2012; the following clause shall be noted -
"Provided further that wherever the period for which property tax paid is different from the period for which service tax is paid or payable, property tax proportionate to the period for which service tax is paid or payable shall be calculated and the amount so calculated shall be excluded from the gross amount charged for renting of the immovable property for the said period, for the purposes of levy of service tax;"
Hence, in my opinion, the property tax can be claimed proportionately;
sir pls refer any case law about co-owners individually claim basic exemption ltd .
Dear Mani,
You may refer to the following case law
Sh. Dineshbhai M. Patel v. CST 2013 (10) TMI 297 - CESTAT AHMEDABAD
In this case law, it was decided that the small scale exemption shall be available to all the joint holders of the property individually.
CAclubindia
