I must say, one has to pay property tax as a commercial renter. The fee that you as a landowner pay to the municipal corporation or local authority for your region is known as property tax. Real estate assets include properties, commercial properties, and residential residences rented to private entities. Let’s study the income tax on rental income from commercial property in India.
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If your yearly rent exceeds Rs.2,40,000 and the property is rented to businesses, organisations, or corporate bodies, the renter is required to deduct 10% tax. Regardless of whether the premises are utilised for business or as a residence. This restriction would relate to each co-owner in the case you have joint ownership.
However, there is an exception to this rule. It has an exception for you as an individual or HUF tenant. If your revenue or turnover from the commercial transaction during the previous fiscal year does not surpass Rs.1 crore in the case of business and Rs.50 lakh in the case of the profession. Then it is excluded from TDS rules.
GST on rental income from commercial property under income tax:
GST will be charged at 18 percent on the chargeable income of all business spaces that you have rented. The rent will be recognised as a taxable supply of service.
A certified charitable trust or a religious trust that owns and operates a public religious site is free from GST. This is only possible if the daily rent for these rooms is less than Rs.1,000.
Monthly rent for stores and other commercial spaces is less than Rs.10,000.
Community halls or other open locations are rented for less than Rs.10,000 per day.
Deductions on rental income:
Municipal taxes are one of the allowable deductions. It is permissible in the year of payment. For example, if you paid the taxes for 2019 and 2020 in February 2021, the total sum can be deducted in FY21.
Regardless of whether you have really spent any expenses or not, you can claim a standard deduction of 30% of the net rental income for property management.
The interest you paid on loans for the acquisition, development, repair, restoration, or reconstruction of real estate is also deductible.
The Act also allows for the deduction of interest paid throughout the construction period in five equal annual instalments. It begins with the year the house property is purchased or built.
I hope you understood the income tax on rental income from commercial property in India.
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Authors Of The Question
Do commercial renters pay property tax?
lekha
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2022-06-07T18:29:22+00:00 2022-06-16T14:40:00+00:00Comment
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