GST on Rental Income

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As we all know Rental Income has considered as the revenue earned from leasing out properties, such as industrial spaces, to third parties. Also, it is most significant for household and individuals. Rental income involves advance rental payments, late payments, and current payments. In this article, we will discuss GST on Rental Income and also the significance of GST Registration.

Before knowing about the method, now you need to ensure some facts about the GST (Goods and Services tax).

Know About GST

GST is an absolute Indirect Tax that has imposed on sale, manufacture, and consumption of goods and services over the nation. It is a separate tax suitable for the supply of goods from the operator to the user. GST is relevant only on purpose extension at each stage. Although, GST registration is obligatory for registering business of courier agencies.

Rate of GST on Rental Income

GST on Rental Income varies 18% of the Rent paid. Moreover, it is significant to note here that GST is only imposed on Renting of Commercial Property but not levied on Renting of Residential Property.

NOTE – GST on Rental Income categorised under SAC Code 997212 will be taxable at 18% GST

Exemptions from GST on Rental Income

 GST on Rental Income is exempted in the following cases:-

  1. The fixed property is a Residential Property used for Residence, or
  2. The complete value of services rendered and goods supplied by the landlord during the year is less than Rs 20 lakhs while the financial year and he does not have a GST Registration.
  3. Rent is being received by a certified charitable trust or a religious trust which owns and manages a religious place meant for the public.

SAC Code applicable for Rental Income 

The following SAC (Service Accounting Code) has established for the different Rental Income in India.

  • SAC Code 9972 – Real Estate Services
  • SAC Code 99721 – Real estate services including owned or leased property
  • SAC Code 997212– Rental or leasing services including own or rented non-residential property

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In case, you require any sort of direction related to the GST registration, GST return filing procedure, or any other GST compliance, please feel free to contact our business advisors at 8881-069-069.

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