Applicability of Service tax on rent income

[KESHAV JAIPURIA]

'A' have a residential property, and that property given on rent basis to a firm for the purpose of firm executive residence, 'A' taken that property as housing loan and pay EMI. 'A' received rent amounting to Rs.2,50,000/- P.M. Is 'A' charge service Tax on rent on that property?

AI Summary

Service Tax on Residential Property Rent: Key Issue is Dual Use for Business; Check Rental Agreement for Clarity. A discussion on the applicability of service tax on rent income from a residential property rented to a firm for its executive's residence. The key issue is whether the property is used solely for residential purposes or also for business, which affects tax liability. One expert advises examining the rental agreement to determine usage. If the property is used for both residential and business purposes, service tax may apply, and the firm could claim cenvat credit. If the property is solely for residential use, no service tax is due. It is recommended to pay service tax to avoid potential litigation.