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Service tax on subletting for residential purpose...?

Queries 1671 views 13 replies

Hello,

I m little confused in classifiying of the following transaction under taxable service.

suppose X  makes an lease aggreement with an owner of a house and subsequently give it on rent for residental purpose .Then is the transaction is taxable if

a) he is an individual?

b) he is a pvt. ltd. company?

and under which taxable service.

Replies (13)

in both the cases service tax will be only applicable if taxable service provided in the financial year Rs.1000000.

it is taxable under sec 65(105)(zzzz) as renting on immovable property.

but service tax is not applicable if it is solely used for residential purposes

I have a little more doubt...

Is the transaction can't be taxable under real estate agent's services

I have a little more doubt...

Is the transaction can't be taxable under real estate agent's services

Nishil The services are classified under 65 105 (zzzz). to answer your question building used for residential purpose are not covered under this section.
you can refer Mr. Hiregange article on this subject /articles/renting-of-immovable-property-service-8472.asp

for X the taking building on lease and subsequent rent the same in commercial transaction, original landlord is not subject to ST, but X is under the servicetax net.

real estate agent is the person who is engaged in the business of  sale, purchase, leasing or renting of real estate. merely a single transaction will not make him a real estate agent therefor i thing it will not be chargable under real estate agent's service.

Thanks everyone for their reply....

i would like to ask something more that if in the given situation the company is doing the transaction as its business.....then is service tax chargeable... 

If it is for commercial purposes it is taxable
Originally posted by : U S Sharma

for X the taking building on lease and subsequent rent the same in commercial transaction, original landlord is not subject to ST, but X is under the servicetax net.

AGREED                  

furthermore, X is eligible for basic exemption of 10L alongwith other services provided , if any.


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