gst rate on rental income with effect from 25 sept 2025

[AIJAZ KAZI]

what is the gst rate on rental income both residential and commercial with effect from 25 september 2025

[Raam Srinivasan Swaminathan Kalpathi]

Dear Querist

There is no change in the rate of GST for renting of immovable property. SAC is 997212 and rate is 18% for renting of commercial immovable property and SAC is 997211 for renting of residential immovable property and the rate is 18% to be remitted by the tenant on reverse charge.

[YAGAY and SUN]

Position as on/after 25 09 2025 (post-GST rate revision wef 22 09 2025):

1. Residential rental income

Renting of a residential dwelling for use as residence continues to be exempt from GST under Notification No. 12/2017-CTR (as amended).

However, taxability depends on the use and recipient:

• If rented for residential use (personal dwelling) Exempt (Nil GST).
• If rented to a registered person for business purposes Taxable @ 18% under Reverse Charge Mechanism (RCM) (tenant pays GST).
• If rented to a registered person in personal capacity for residence Still exempt (clarified position continues).

Thus, the rate is effectively 0% or 18% depending on use, but no change in rate structure occurred in Sept 2025.

2. Commercial rental income (non-residential property)

Leasing/renting of commercial property (shops, offices, warehouses, etc.) is treated as supply of services and is taxable @ 18% GST.

Key legal position post-Sept 2025:

• GST rate remains 18% (no change after 22 09 2025 reforms).
• Forward charge (FCM): Where landlord is registered landlord charges GST.
• Reverse charge (RCM):
  • If unregistered landlord registered tenant (normal scheme) GST payable by tenant under RCM (as amended up to 2025).

3. Impact of September 2025 GST changes

The GST restructuring effective 22 September 2025 rationalised slabs (0%, 5%, 18%, 40%), but did not alter the taxation of renting services, which continue under the standard 18% rate or exemption.

Conclusion (precise):

• Residential rent (for residence): Exempt (0%)
• Residential rent (for business / to registered entity): 18% (generally under RCM)
• Commercial rent: 18% (FCM or RCM depending on parties)

No specific change in GST rate on rental income was introduced wef 25 09 2025; only the broader rate structure changed, leaving rental taxation substantively unchanged.

[Pinnacle Tax Advisor]

No change in GST rate on renting income. Rent from commercial property is liable to GST @18% under FCM and residential property is liable to GST @18% under RCM if provided to registered person, else will come under exempt category.

[Shilpi Jain]

In general, If liable to GST the rate is 18%.

However the taxability for renting of residential property has various aspects to consider before concluding RCM/FCM 18% / 12% / 5%

AI Summary

GST on rental income remains unchanged, with residential dwelling exemptions and 18% tax on commercial leasing.
Renting of immovable property continues to be taxed or exempted according to the nature of the property and the purpose for which it is used, and the September 2025 GST rationalisation does not alter the basic treatment of rental income. Renting of a residential dwelling for use as a residence remains exempt from GST, while residential rent taken for business use by a registered person is treated as taxable under reverse charge in the stated position. Commercial renting remains taxable at 18% GST.