GST (Tax) On Rentals? Registered Tenants To Pay 18% Tax On House Rent

 

A tenant, who is registered under the GST, is required to pay Goods and Services Tax at 18 per cent for renting a residential property, according to the new GST rules effective from July 18. The 18 per cent tax on rent paid is only applicable to tenants registered under the GST.

Read More:-5 Simple Steps To Order Food Online On Trains

Earlier, only commercial properties like offices or retail spaces given on rent or lease attracted GST. There was no GST on rent or lease of residential properties by corporate houses or individuals.

As per the new rules, a GST-registered tenant will be liable to pay the tax under the reverse charge mechanism (RCM). The tenant can claim the GST paid under Input Tax Credit as a deduction.

Read More:-Flood Alert In Delhi: Yamuna Water Level Likely to Cross Danger Mark On Saturday Amid Heavy Rains

The tax will only apply when the tenant is registered under GST and liable to file GST returns. The owner of the residential property is not liable to pay the GST.

“If any common salaried person has taken a residential house or flat on rent or lease, they do not have to pay GST.

However, a GST-registered person who carries out business or profession must incur 18 per cent GST on such rent paid to the owner,” explained Archit Gupta, founder and CEO at ClearTax, reported Mint.

Read More:-Income Tax Return: Not Received Refund Yet? Here’s How to Check ITR Refund Status Online

A GST-registered person, who offers services from a rented residential property, will be liable to pay the tax at 18 per cent.

Under the GST law, registered persons include individuals and corporate entities. The GST registration is mandatory when a person carrying out business or profession reaches an annual turnover of more than the threshold limit.

The limit under the GST law varies according to the nature and place of supply. The threshold limit for a registered person supplying services alone is ₹ 20 lakh in a financial year.

Read More:-Byju’s Aakash Choudhary Buys Rs 137 Crore House In Delhi’s Chanakyapuri

The limit for a supplier of only goods is ₹ 40 lakh. However, if the registered entity is located in any of the northeastern states or special category states, the threshold limit is ₹ 10 lakh per financial year.

Who Will This Impact

The new changes, implemented after the 47th meeting of the GST Council, will impact the companies and professionals who have taken residential properties on rent or lease.

Read More:-Adani Group’s Rs 57,575 Cr Investment In Odisha To Open Up Nearly 10K Direct Jobs

The rent paid by companies towards the housing properties taken on rent to be used as guest houses or residences for employees will now attract 18 per cent GST. This will increase the employees’ costs for the companies that are offering free accommodation to employees. 

Comments

Post a Comment

Popular posts from this blog

Senior Citizen Train Ticket Discount: Government has issued a new statement regarding giving discount to senior citizens on train tickets, know the details here

Image
  Senior Citizen Train Ticket Discount: Once again a demand has been made in the Lok Sabha to give discount to senior citizens on train tickets. Senior Citizen Train Ticket Discount:  Railways has withdrawn the discount given to senior citizens on train tickets since the Corona period. However, from time to time there has been a demand to restore this concession given to senior citizens in trains. Even in the winter session of the Lok Sabha, some members raised the demand for increasing fare concessions and facilities for senior citizens traveling in trains. However, even before this, Railway Minister Ashwini Vaishnav has told in the Lok Sabha that during the train journey, every passenger is given an average subsidy of 53 percent on the train ticket. Apart from this, he also told who gets discount on tickets while traveling by train. Demand for discount in train tickets raised again During Zero Hour in the House, Janata Dal (United) MP Kaushalendra Kumar said that before the Corona ep
Read more

Cash Transaction Rules: Income tax rules on cash transaction between Husband-Wife and Son-Father, know rules

Image
  Cash Transaction Rules: Income tax keeps an eye on our every transaction. But is there any tax on cash transactions or can Income Tax send a notice? Or how much cash transaction can take place between you and your wife or between father and son? If you also have these questions in your mind, then let us know their answers… If you also transact money between father and son or between husband and wife, then this news is useful for you. Actually, every transaction of ours has an eye on income. In such a situation, a question arises in the minds of many people whether income tax notice can be received even on cash transactions? Let us know how much cash transaction you can do in your family. Income tax sends notice? According to tax experts, if you give money every month for household expenses or give money as a gift, then the wife is not liable for income tax. Both these types of amounts will be considered as the income of the husband. The wife will not receive any notice from the Incom
Read more

Have a Current/Savings Bank Account? Know the Cash Deposit Limits under Income Tax Act to avoid Penalties and Notices

Image
  Adhering to cash deposit and withdrawal limits is crucial to remain compliant with the Income Tax Act in India. This article aims to elucidate the various facets of cash-related regulations, encompassing savings and current accounts, fixed deposits, credit card bill payments, real estate transactions, and more.  Cash Deposit Limits in Savings and Current Accounts The Indian Income Tax Act imposes specific regulations on significant cash deposits in savings accounts. Individuals accumulating INR 10 lakh or more during a fiscal year must notify tax authorities.  For current accounts, this threshold is set higher at INR 50 lakh. Although not immediately taxed, financial institutions report transactions exceeding these limits.  Cash Withdrawal and TDS under Section 194N  Section 194N outlines TDS rules for cash withdrawals. A 2% TDS is levied on withdrawals exceeding INR 1 crore within a fiscal year. Non-filers face a 2% TDS on withdrawals over INR 20 lakh and a 5% TDS on amounts exceedi
Read more