Renting Of Immovable Property

[Amar Ramani]

सर,

मेरे पास एक प्रॉपर्टी है। जिस पर मुझे 100000 रुपये मासिक किराया मिलता है। मैं प्रॉपर्टी पर सालाना म्युनिसिपल टैक्स 35000 रुपये भी अदा करता हु।

मेरा सवाल यह है कि,

1. मैं अगर बिल में 100000 रुपये किराया व 15000 रुपये टैक्स के अगल से दिखता हूं, तो मुझे प्रॉपर्टी टैक्स का set-off कैसे मिल सकता है व उसका Calculation कैसे होगा?

2. अगर मैं बिल में एक ही अमाउंट दिखता हूं 115000 रुपये, मतलब Inclusive of Tax तो क्या इस केस में म्युनिसिपल टैक्स का फायदा मिलेगा। अगर मिल सकता है तो किस Section में और उसका Calcultion कैसे होगा?

धन्यवाद

आपका आभारी

[YAGAY andSUN]

Calculation

35000/12=2917*6=17500

600000-17500=582500*14% +.50%+.50%

However, thanks for raising query in Hindi

[YAGAY andSUN]

Property tax would be deducted from the taxable amount on monthly basis. Say you pay 12000 as property tax then 1000 per month would be deducted from 100000 comes to ₹ 99000 and on this 99000 you will calculate the Service tax.

[KASTURI SETHI]

Dear Querist, I fully support the views of M/S. YAGAY AND SUN, Experts.

[Amar Ramani]

Sir, Please Clarify

I have issued a Bill for the month of April under Renting of Immovable Property Service As

Taxable Value ₹ 100000

Service Tax ₹ 14000

Swachh Bharat Cess ₹ 500

Total Rs 114500

and i have paid Proportionate Property tax Paid for the month of April is ₹ 25000. Now what will be my Service tax payment ?

a. ₹ 14500 as i have Collected Separately from Tenant as per agreement or

b. Rs (100000-25000)*14.5% = 10875.

Thank u

[KASTURI SETHI]

You cannot collect ST more than due amount from service receiver.

[Amar Ramani]

Sir as per agreement Rent per month is ₹ 100000 and Service tax Extra. Property tax is to be paid by me. We have Received 114500 and property Tax paid by me.

[KASTURI SETHI]

AMAR Ramani Ji, M/S. Yagay and Sun' reply is very much clear. If you do not claim deduction as advised by M/S. Yagay and Sun and want to pay more as you have collected ST more than due it is wrong in the eyes of law. You cannot execute any agreement in violation of ST law. It is always advisable to pay as per law. By paying more, credit would be taken in excess by service receiver.

[Amar Ramani]

Sir Thanks to all of u for your precious Reply and cleared my query.

Thank u

[Ganeshan Kalyani]

If you are paying ST for the first time then consider basic exemption limit of ₹ 10 Lacs.

AI Summary

Property tax deduction from taxable rent reduces service tax base; suppliers must not collect service tax in excess of legal liability. Proportionate municipal/property tax paid by the supplier is deductible from gross rent on a monthly basis to determine the taxable value for renting of immovable property; the reduced taxable value is then used to compute service tax and related cesses. Separate invoicing that shows tax inclusive or exclusive does not alter the legal requirement that computation must be made after allowable property tax deduction, and suppliers must not collect service tax in excess of the legally due amount. Consider basic exemption thresholds where applicable.