Service tax on residential properties let out for residential purpose

[Guest]

Hi,

Please can anyone help on this. I am renting out my home for residential purpose. The owner advised me that his property is owned by his Ltd company and I need to pay service tax.

Having gone through this forum and extensive research I couldn't find the information that do I or the landlord pay the service tax even though it's let out for residential purpose and the total rent value in any year is much less than 10 Lakhs. The only catch is that the property is in the name of the landlords pvt Ltd company.

Please advise? Also if this agreement is subjected to service tax can I as a tenant take rebate on the service tax? My landlord advised that I can take rebate from other service taxes I have paid (like on electricity or mobile bills etc) to set off against the service tax to be paid on rent.

Thanks

AI Summary

Residential Property Rentals Exempt from Service Tax Under Finance Act 1994; Only Commercial Rentals Taxable A forum participant inquired about the applicability of service tax on residential properties rented out for residential purposes, especially when the property is owned by a private limited company. The concern was whether the tenant or landlord is responsible for the service tax, given that the annual rent is below 10 Lakhs. Respondents clarified that, according to the Finance Act, 1994, renting residential dwellings for residential use is not subject to service tax. They also confirmed that service tax applies only to properties rented for commercial purposes, and no rebate on service tax paid for residential rent is applicable.