Small Scale Exemption of Joint Property

[ARUNKUMAR AGRAWAL]

There are four owners of a property. The property has been purchased jointly. The rent agreement is separate for each landlord. The TDS deducted is individually. Can we enjoy Small Scale Exemption Individually. i.e. Ten Lakhs each.

AI Summary

Co-owners Individually Eligible for Service Tax Exemption on Rental Income, Says Ruling; Revenue's Appeal Rejected. Four co-owners of a jointly purchased property in Jalgaon entered into separate rental agreements with various banks. The issue was whether each owner could individually claim a small-scale exemption of 10 lakhs under service tax laws. The Commissioner of Central Excise, Nasik, demanded service tax by clubbing the rental income, but the CESTAT Mumbai ruled in favor of the co-owners, allowing individual exemptions. The ruling was based on the fact that the property was owned individually, not as an association of persons, and each co-owner had separate rental receipts. The Revenue's appeal against this decision was rejected.