Monday, June 25

Service Tax on Immovable property (New Notificaton)

Notification No. 29/2012- Service Tax (New Delhi, the 20th June, 2012)

Under notification No. 29/2012 - Service Tax, the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the taxable service of renting of an immovable property, from so much of the service tax leviable thereon under section 66B of the said Finance Act, as is in excess of the service tax calculated on a value which is equivalent to the gross amount charged for renting of such immovable property less taxes on such property, namely property tax levied and collected by local bodies:

1) Any amount such as interest, penalty paid to the local authority by the service provider on account of delayed payment of property tax or any other reasons shall not be treated as property tax for the purposes of deduction from the gross amount charged.
2) Wherever the period for which property tax paid is different from the period for which service tax is paid or payable, property tax proportionate to the period for which service tax is paid or payable shall be calculated and the amount so calculated shall be excluded from the gross amount charged for renting of the immovable property for the said period, for the purposes of levy of service tax.

Property tax paid for April to September (6 months) = Rs. 12,000/- i.e. Rs 2,000 per month
Rent received for April = Rs. 1, 00,000/-
Service tax payable for April = Rs. 98,000/- (1,00,000 - 2,000) * applicable rate of service tax

2. This notification shall come into force on the 1st day of July, 2012.

[F.No. 334 /01/2012- TRU]


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  2. Thanks for updating..Very important to know

  3. This comment has been removed by the author.

  4. This is a good post. This post give truly quality information.I’m definitely going to look into it.Really very useful tips are provided here.thank you so much.Keep up the good works

  5. suppose i m charging rent rs10000 p.m .and collecting
    now at the time of payment i'll had t0 pay 2000 i.e. on rs.80000 @ 12.36%=9888. so does not it amount to exces colletion and short payment of service tax. kindly clear and mail me

  6. I think, this is really very well information given about property in Safdarjung Enclave. Thanks for given about this information . Thanks again.
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