Legal Question in Tax Law in India

Service tax on rent

Myself and my brother own a builidng which is given on rent for 13lakhs. Out of the rent rs9lakh is paid to my brother and balance rs4 lakh is paid to me by the lessee. This is in proportion to the right we have in the building. My doubt is whether the service tax is to be calculated on the entire 13 laksh and we both have to take the service tax registration or is it sufficient that my brother who is receiving the rent above the threshold limit of rs8lakh alone liable to pay service tax and to take registration. Kindly advice


Asked on 9/12/07, 9:14 am

2 Answers from Attorneys
Homi Maratha N.N. Maratha & Co.-Advocates

Re: Service tax on rent

you both are liable to pay the service tax.

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Answered on 9/13/07, 1:27 am
Balasubramanya Beeranna Balasubramanya&Ramesh Associates

Re: Service tax on rent

Both of you are liable to Service tax and you have to pay service tax at the rate of 12.36% on the rent received.

The exemption is upto 8 lakhs per Annum only. once you cross the above limit you have to collect the service tax from your Tenant and pay that amount within 5th of each month.

REMEBER YOU HAVE TO COLLECT FROM YOUR TENANTS AND PAY THE SAME TO THE DEPARTMENT.

REGARDS.

B.BALASUBRAMANYA.

ADVOCATE.

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Answered on 9/13/07, 1:29 am


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