“Is there GST on commercial rental income” is what I was asking my father yesterday. He told me that yes, you are required to pay GST and that the threshold limit of GST applicable on rent (commercial purposes) is 20 lakhs.
Let me explain this using an example:
Sakshi who stays in Delhi owns property in Hyderabad. Now, an organization ABC rents it out from her and starts using it as a guesthouse. They are paying a monthly rent of Rs. 20K. Now, the annual rental income of Sakshi would be Rs. 2.4L. Therefore, Sakshi won’t have to pay GST on rent, as it comes under the limit.
GST on Renting of Immovable Property for Commercial PurposeIf you rent out an immovable property for a commercial or business purpose, then you will be required to pay GST on commercial rental income. In this case, the rate of GST would be 18 percent on the taxable value. Now, Sakshi (the owner) would apply GST as well as the division of GST on rent on commercial property in this manner:
Intra-State TransactionMonthly rental Income of Sakshi: Rs 2,50,000
Addition of SGST at 9 percent: Rs. 22.5K
Addition of CGST at 9 percent: Rs. 22.5K
Total Invoice amount: Rs 2.95L
Inter-state TransactionMonthly rental Income of Sakshi: Rs. 2.5L
Addition of IGST at 18 percent: Rs. 45K
Total Invoice amount: Rs. 2.95L
I hope now you have an answer to “Is GST applicable on rental income from commercial property”
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Authors Of The Question
is GST applicable on rental income from commercial property
Neel
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2 Year
2021-12-07T18:26:56+00:00 2021-12-09T12:16:44+00:00Comment
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