Exemption availability on rent received

[JOSHIL JAIN]

I have given a property to a company on which I receive annual rent of Rs. 500000.00. Whether I have to charge service tax on that or a exemption of Rs. 8,00,000.00 is available to me. Please also advise if the property is let out to company with five other coowners. and each getting Rs. 5,00,000.00 Then what will be the position regarding service tax. Please advise.

[Madhukar N Hiregange]

ST is on the service receiver and not on the property. Therefore the 8 lakhs exemption would be available to you as long as you do not provide any other taxable servcie. Co -owners who each receive less than 8 lakhs also would not be liable.

AI Summary

Service tax liability falls on the service receiver; exemption threshold shields rent where no other taxable services exist. Liability for service tax on rent is borne by the service receiver, and the statutory exemption threshold applies at the recipient level; where a recipient does not render other taxable services, rent receipts below the exemption threshold are not liable. In co ownership situations, exemption is assessed for each co owner's individual receipts, and co owners whose receipts fall below the threshold are not liable provided they do not supply other taxable services.