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Query reg deductions of property tax with regard to service tax on rental income on commercial property?

• Dear Sir / madam, As per the new service tax law, service tax is liable on rental income on commercial buildings, 1. if the tenent refused to pay the service tax on rent, is there any rules in the service tax, where we can ask the tenent to pay the service tax by himself ? 2. Whether property tax is deductable from the rent and then for the balance, do we have to calculate the service tax ? or can we deduct the property tax from the service tax payable to the department ? awaiting your clarifications in this regard thanks and regards S.Guruprasad

• Answer:

  As far as I know : 1. Service tax must be paid by tenant to the landlord. He can't refuse to pay. You can't ask tenant to pay the service tax to the govt. You must pay it. 2. No, property tax is not deductible from the rent. You have to pay service tax on full amount of rent. 3.You can't deduct property tax from the amount of service tax before paying it to the govt. If your are putting new tenant in your premises, you can bifurcate it in two parts 1) rent for the property & 2)other services. But expert opinion must be sought in this regard. If the tenantable property is co-owned my more persons, each one can give diff. receipt and may come out of clutches of the service tax. But be carefull and take proper consultation.