In a major relief to individual investors and home owners, Goods and Services Tax (GST) will not be levied on rental income. Until the last month, there were speculations of income from renting out a residence would be taxed at 18% under GST.
The 14th Meeting of the GST Council held at Srinagar on May 19th had specifically exempted “Services by way of renting of residential dwelling for use as residence” from the tax net.
Earlier, income from renting residential property was brought under the ambit of service tax by the Government. However, the same had been withdrawn later, by sustaining service tax on rental income from a commercial property. Presently, service tax of 15% has to be paid on commercial property rental income.
There are speculations within the industry that the next GST Council meet is likely to put lease earnings from a shop or a commercial space in the 18% bracket. However, now the rates are fixed with a specific exemption to rental income.
