service tax on rent

This query is : Resolved

Seema Karwa (Querist)
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08 April 2010 A landlord has became an Assessee since rental income exceeded Rs.10 lacs in the 1st year. Rental has got reduced due to market recession and has become less than Rs.10 lacs (annual) in the second year. Is he still liable to claim service tax (from tenant) and pay to the exchequer?

ca dipti sharma

ca dipti sharma (Expert)
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08 April 2010 If rental income exceeds the limit of Rs 10,00,000/- in previous financial year, then only he is liable to pay service tax and claim accordingly from tenants.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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08 April 2010 AGREE

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CA Gangadhar Mishra

CA Gangadhar Mishra (Expert)
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08 April 2010 If commercial rental income exceeds 10 lacs in the previous year then service tax is applicable from the date in which the amount exceeds 10 lacs. in the subsequent year even if your rental income is less than 10 lacs you are liable to pay service tax. but in the 3rd year service tax is not applicable since in 2nd year amt recd is < 10 lacs, but it will be applicable when amt recd exceeds 10 lacs.