Income tax

This query is : Resolved

R. vishwanathan (Querist)
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28 May 2013 sir

please tell me the compliance of SERVICE TAX ON RENT RECEIVED...

AND if liability arises..how much is the percentage...and whether service tax no. is required

urgent...
thanx

Sumit Grover

Sumit Grover (Expert)
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29 May 2013 Service tax on renting of immovable property is a declared service as defined under section 66E & the same is taxed @ 12.36%

Following points need to be noted:

1) Renting of a residential dwelling for residential use is non-taxable by virtue of clause m of Section 66D(i.e. negative list)

2) While computing the taxable value, the property tax paid to the local bodies/authorities shall also be deducted.

And yes, definitely, the service provider is required to obtain the Service tax Reg. no. by applying in form ST-1.

R. vishwanathan

R. vishwanathan (Querist)
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29 May 2013 what is the limit of rent received beyond which it needs registration...

and please clear the TDS on rent received ...

give example of both tds and service tax applicability...

thank u ...

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Sumit Grover

Sumit Grover (Expert)
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29 May 2013 Service tax:

The total limit for registration is Rs. 9 Lakhs
but service tax liability arises after crossing Rs. 10 Lakhs

TDS:

TDS is deducted on the amount of rent income(excluding the amount of service tax thereon).
Limit of TDS is Rs. 1,80,000 for the whole Financial Year.

following are the TDS rates rent pertains to ---
Renting of Land/Buildind/Furniture---10%
Renting of Plant/machinery---2%

R. vishwanathan

R. vishwanathan (Querist)
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29 May 2013 so if rent is 20000 per month...and service tax thereon is 240000 * 12.36%

but as rent for whole year is 240000 and accordingly tenant required to deduct 24000 TDS excluding service tax as it exceeds 180000

please tell me when tenant is required to deposit TDS and required TAN NO. ALSO..

thank u so much...

Sumit Grover

Sumit Grover (Expert)
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29 May 2013 If you have started renting service for the first time in this year, then no service tax shall arise till Rs. 10,00,000.

And yes, the tenant needs to obtain TAN no. and deduct, deposit TDS & file quarterly TDS return.
And after that you can take the Credit on the basis of TDS reflecting in your form 26AS,while determining your advance tax/final tax liability

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R. vishwanathan

R. vishwanathan (Querist)
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29 May 2013 THANK U....:)