Service Tax component is chargeble to tax or not.

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Madhuri Sawant (Querist)
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29 September 2010 Can anybody help me on the issue of:-

Whether service tax component collected from tenant on rental income is chargeble to income tax or not.

Prima Facie relying on the circular no 4/2008, we can say that the service tax paid by the tenant doesnt partake the nature of income of the landlord. The landlord only acts as a collecting agency for Government for collection of service tax.

CA Arvind Singh Chawla

CA Arvind Singh Chawla (Expert)
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02 October 2010 Your understanding is correct, same not treated as income. However the income tax circular is applicable only in respect of rental income and not to others like consultancy/ contractors etc.