TaxTMI 
TaxTMI 
'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?
Applicability of Service tax on rent income
18 Apr 2008 
3 Replies 
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Service tax on rent income may apply when residential premises are provided by an employer for business use.
Applicability of service tax on rent depends on use and payer: rent paid by a firm for an executive's accommodation may be taxable if the premises are used in the course of furtherance of business or for both official and residential purposes; the lease agreement must be examined. Employer-paid rent treated as part of employment perks can attract service tax, with the firm able to claim Cenvat Credit if eligible. Rent paid directly by the employee (even if reimbursed) or premises used solely for residential purposes are ordinarily exempt. (AI Summary)
Applicability of service tax on rent depends on use and payer: rent paid by a firm for an executive's accommodation may be taxable if the premises are used in the course of furtherance of business or for both official and residential purposes; the lease agreement must be examined. Employer-paid rent treated as part of employment perks can attract service tax, with the firm able to claim Cenvat Credit if eligible. Rent paid directly by the employee (even if reimbursed) or premises used solely for residential purposes are ordinarily exempt. (AI Summary)