New Delhi: The new GST rules that came into effect from July 18 has mandated tenants, registered under the Goods and Service Tax, to pay 18 per cent GST for renting a residential property. If you’re a salaried employee, and you have rented out an apartment or a house, you don’t have to pay this 18 per cent GST. This is ONLY applicable to those tenants who have registered under the GST. The GST paid can be claimed through Input Tax Credit.
Read More:-This Multibagger Stock Hits Rs 50,000-per-Share Mark Today; Do you Own?
Commercial properties such as offices or retail spaces had, earlier also, attracted GST. However, the lease of residential properties by companies or individuals (registered under the GST) did not attract any tax. Following the recommendations of the 47th GST council, residential property given out on lease or rent attracts GST under certain circumstances.
The liability of paying the GST falls under the tenant registered under GST and not the owner of the property. Under the GST law, registered persons can include both individuals (doing businesses) and corporate entities. The registration becomes mandatory when the business run or the person’s profession reaches an annual turnover more than the threshold limit.
Read More:-Kotak Mutual Fund Launches Smart Facility for SIP, STP, SWP Investors
The new changes under the GST rules will impact companies and individuals (registered under GST) who have taken residential properties on rent or lease. Rent paid by organisations towards the housing properties being used as guest houses or residences for employees will now attract 18 per cent GST.
