Service tax on Rental Income

Page no : 2

Dilip Darji (392 Points)
Replied 16 November 2007

Service provider is required to pay Service Tax based on the payments received towards the value of taxable services, irrespective of their share in the property renting. However, this is subject to a general Exemption under Noti.No.6/2005-St dt.01/03/05, providing for exemption of Rs.8/- Lakhs, in a preceeding Financial Year.

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Vijay K. Agrawal (Service) (608 Points)
Replied 16 November 2007

yes . aseessment will be service provider wise becuase he may be providing no. of other services. also exemption limit is applicable to each service provider

sanjib (ca) (32 Points)
Replied 19 November 2007

In case of service tax on rent whether the service tax will be payable on entire rent receipt or only rent exceeding Rs. 8 lacs

(Guest)

My Rental Income is Rs. 21 lacs per annuam. Please clarify , the service tax should be calculated and paid for the full 21 lacs or I have to pay the service tax only for 13 lacs as service tax becomes applicable only when the annual rental income exceeds 8 lcas . Pl clarify .

(Guest)

Rental income upto Rs.8,00,000/- is exempt from service tax. I want to make it clear that when rental income exceeds Rs.8,00,000/-, service tax will be charged on the income above Rs.8,00,000/- only or on the income upto Rs.8,00,000/- also.

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(Guest)

If we are having a commercial complex with 12-15 occupants and collecting rents varying from Rs.2500 - Rs.12000 per month and the total comes to around Rs.80000 per month in total. Then the total rent collected will come to Rs.960000. So are we liable to pay the service tax?

shyam kishor porwal (Chartered Accountant) (183 Points)
Replied 17 December 2007

If you are providing only renting service. Then taxable receipt up to Rs. 8 lakh will be exempt and above Rs. 8 lakh will be taxable. subject to no input credit. Pls read notification no. 6/2005

(Guest)

Sir Actually we are running a computer training centre franchisee unit as well as a Pre-School in a building. The total rent that we are paying to the owner for the premises is 1.25 lacs which is split into 7 cheques in 7 names to the owner. The owner says that we are liable to pay him the service tax on 1.25 lacs. Is it right ? Actually is it possible for us to claim any exemption and if so how? Pls help

(Guest)

Are exporters exempted from paying service tax on rented showroom premises ? Who is liable to pay the service tax...landlord or tenant?

Anil Kumar Agarwala (CA) (67 Points)
Replied 18 January 2008

Hello Prity Only above 8 lakhs. But remember that this exemption will be available only in the first year. If once during a year, gross service receipts exceeds 8 lakhs, this basic exemption is not available in subsequent years.

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shyam kishor porwal (Chartered Accountant) (183 Points)
Replied 18 January 2008

If you are not providing any other taxable service in current year. then you can take the benefit of Rs. 800000/- Service tax will be charged on and above Rs. 800000/- and you will not be eligible for cenvat credit during the year,

chaitanya (Asst Manager finance) (85 Points)
Replied 19 January 2008

Himanshu sir, you have replied that the company has to charge service tax on the co-owners.But my doubt is whether it can be considered as rent why means........ 1)The company did reconstruction of building ,for which there may be some consideration that may be paid as per agreement .why can't we think such payment of half portion paid by the co-owners to the company is instead of consideration. 2) If the company has already received consideration for such contract, let me know what is the nature of amount received by the company. Did it comes under rent? I don't think rent can be collected from the owners. please tell me if i was thinking wrongly hope you reply me for this query.

(Guest)

Pls clarify my doubts. I m paying Rs.50,000/- rent to 7 co-owners in 7 cheques as per ratio of co-owners. Now the 7 owners hve registered their building name in service tax departement and obtained one number. The 7 owners insist us to pay the rent divided as per ratio to the co-owners individually and service tax in one cheque to building name as registered. I m ready to pay service tax to the 7 co-owners if each of them have registered singally or service tax shall be paid in building name if the rent cheque collected in building name too. This is my argument with co-owners but they are not accepting to this. So how shall i pay the service tax when i pay the rent individually to 7 and why service tax in building name? pls reply

piyush (ca- final) (45 Points)
Replied 01 February 2008

you will be liable to pay to pay service tax as it exceeds the limit of Rs. 8 lacs in a financial year. first of all you got to register as a assessee under service tax.(ST-I). The service will be liable from 1st june 2007. so if you had not paid the service tax till now you will be liable to pay a intrest of 13% per annum and also Rs.200 per day of default. for more assisstance contact 9868737230.

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(Guest)

Please send me the reply of I am receiving a rent Rs 1.00 lakh per month which is sharing equally myself and my wife. The property is in the joint name. The property has given letout for a software company. As per the latest provisions of service tax, the service tax will be levied on rentals. Please guide the service tax provisions, whether service tax applicable to this case? In case if required to pay service tax.. who has to pay the service tax i.e service provider or service receiver. Please clarify ?