Best answer: What is the GST rate for renting of immovable property?

When you rent out a residential property for residential purposes, it is exempt from GST. Any other type of lease or renting out of immovable property for business would attract GST at 18%, as it would be treated as a supply of service.

Is GST applicable on renting of immovable property?

Under GST law, exemption has been provided in respect of services by way of renting of residential dwelling for use as residence. Accordingly, in case you have rented out your residential house or flat to anyone for residential use, it will be an exempted supply and GST will not be applicable thereon.

Who pays GST landlord or tenant?

By rule, the landlord or owner of the property given on rent needs to collect applicable GST from the tenant or person paying rent. The amount of GST will be levied on the rent charged. The person paying the rent needs to deduct TDS at 10%, in case the rental amount for the property is more than Rs. 1.80 lakh per year.

What is renting of immovable property?

Renting of immovable property includes renting, letting, leasing, licensing or other similar arrangements of the immovable property. Renting of immovable property does not include renting for a religious body or to an educational body. Renting of immovable property is a service and it is subject to Service Tax.

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Is rent GST taxable?

Rental income is a GST/HST exempt supply. This means that you cannot charge GST/HST on rent. … Normally, you can claim this GST/HST paid on expenses as Input Tax Credits (ITCs), but since rental income is exempt, so you cannot claim ITCs either. Actually, you should not be filing a GST/HST return at all.

How do I avoid GST on rent?

If the total value of services provided and goods supplied by the landlord during the financial year is less than Rs. 20 Lakhs – he is not required to obtain GST Registration No. and is exempted from collecting GST on Rent.

How is GST calculated on property?

On residential properties that are not part of the affordable housing segment, GST charges on a flat purchase will be paid at 5% without an input tax credit (ITC). Residential properties included in the affordable housing segment will be subject to a 1% GST without an ITC.

How much rent income is tax free?

Rental income from the property is a pretty common source of income in India and for the financial year 2021-2022, income up to Rs 2,50,000 is tax-free for individual taxpayers.

Is reverse charge applicable on rent under GST?

So, a person who is registered under GST, who gets supplies of goods or services from a person who is not registered under GST, will have to pay the GST under the reverse charge mechanism. Under the service tax regime, there is no provision of reverse mechanism, with respect to the rent paid by the lessee.

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Is rental income subject to SST?

The rental of the space is not subject to service tax because it is located outside the accommodation premises.

On what Turnover GST is applicable?

A business whose aggregate turnover in a financial year exceeds Rs 20 lakhs has to mandatorily register under Goods and Services Tax. This limit is set at Rs 10 lakhs for North Eastern and hilly states flagged as special category states.

Is rental income zero rated or exempt?

All residential letting income is exempt and no associated VAT can be recovered, although in some circumstances if work is undertaken to convert a non-residential property to residential, or renovate a property that has been empty for a number of years, the builder may be able to charge VAT at the reduced rate of 5%.

Is there GST on long term rentals?

Essentially, long term-rentals are exempt from GST/HST, while short-term rentals are subject to the tax.