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Service tax on residential & commercial property renting

10649 views 1 replies

Snehal

Learning Tax

129 Points Posted on 02 August 2013

Hello, and Individual has rented in F.Y 2013-2014,

(1) An Commercial property @ 50K per month = Annual 6 lacs

(2) Another Commercial property @ 1 lacs per month = Annual 12 lacs

(3) An Residential Flat for purely residential use @ 40k per month = Annual 4.80 lacs

(4) Another Residential house for purely residential use @ 25k per month = Annual 3 lacs

Now this year the Individual will be applying for Service Tax Registration.

What will be included for calculation of Service Tax, I understand only commercial property will be liable for Service tax?

So Service Tax for F.Y 2013-2014, being first year will be on (6+12) 18 Lacs - 10 Lacs = 8 lacs

& Service Tax for F.Y 2014-2015, onwards will be on complete 18 Lacs

Is it correct? or even residential rent also has to be considered for Service tax applicability?

Please can someone reply ASAP, Thanks.

Replies (1)

CA Chandrashekar L

Practicing Chartered Accountant

245 Points Posted on 03 August 2013

1. Department vide its Education Guide dated 20.06.2012 has clarified that Renting of Residential dwelling for the use as residence has been exempted from Service Tax.

2. Hence Rent received from residential Flat / House is not subject to Service Tax.

3.Rent received from the another two commercial Property will be subject to service tax . However property taxes paid on such property will be allowed as deduction as per Notification No. 29/2012. ( The Notification has explained the manner of computaion of deduction.)

4. You can avail the threshold level exemption upto 10lacs for the first Year.

Thanks & Regards,

CA Chandrashekar L