Updates for GST on Rent: GST is applicable in India from 1st July 2017. Now, India has switched to the new indirect tax regime which promises “One Nation, One Tax, One Market” to the whole country. GST on rent has also got good chaos among the citizens, so here we try to provide some light on the provisions of GST on rental income.
The new tax rate for Goods and Services are under 5%, 12%, 18% and 28%. The essential goods and services attract nill rates of GST under exempted categories. Luxury goods and services and certain specific goods and services attract additional cess than 28% GST.
GST on rent:
GST on rent property for residential purpose is exempt in GST as was in service tax. But if you are renting your property to any dealer for commercial purpose and cross the threshold limit, you have to charge GST @18% on the rental amount and issue a tax invoice periodically to the tenant. So, rent expenses will increase marginally (but not effectively).
You need not collect GST on rent initial advances received if they are refundable on termination of the rental agreement. But on termination, if you withhold any part of the advance for any reason, GST is to be charged on the amount withheld.
- GST 5% Item List, GST 5 Percent List in India
- GST 12% Rate Items List in India
- GST 18% Rate List, GST 18 Percent Item List in India
- GST 28% Item List, GST 28 Percent Rate list in India
As per GST on rent Law, no GST is payable on services by a person by way of renting of precincts of a religious place meant for general public. So GST on Rent is payable on Services by a person by way of renting of precincts of a religious place meant for the general public is nill rate.
Must Check: GST – Registration, License, Recognition, Permit
Services by a person by way of Renting of precincts of a religious place meant for general public-owned or managed by an entity registered as a charitable or religious trust under section 12AA of the Income-tax Act, 1961 or a trust or an institution registered under subclause (v) of clause (23C) of section 10 of the Income-tax Act or a body or an authority covered under clause (23BBA) of section 10 of the Income-tax ACT:
However, the exemption shall not be applicable to renting of rooms where charges are Rs. 1000 or more per day, renting of premises, community halls, kalyanmandapam or open are, etc where charges are Rs.10,000 or more per day, and renting of shops or other spaces for business or commerce where charges are Rs. 10000 or more per month.
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