Understanding GST on Rental income

What is the New Rule about GST on Rental income?

People who use their properties to generate rental income for business purposes must pay GST. Renting out your house can be seen as a service within the tax system. As a result, the Goods & Services Tax (GST) law, which went into effect in July 2017, applies to rental revenue.

Thought Behind GST on Rental income

The GST framework views rentals for commercial use as a taxable service. When your yearly rental revenue is Rs 20 lakh or higher, you must pay GST under the new tax system. This threshold was previously Rs. 10 lakh.

When renting corporate residences or guesthouses to employees, businesses will pay GST at 18%. Under the new rules, the GST Council has eliminated the earlier exception to residential unit rentals. GST at 18% will be due to GST-registered renters, whether the landlord is GST-registered or not.

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FAQs: GST on Rental income

How can I pay my rent’s GST?
The landlord has to register and pay tax if GST applies to rental revenue.
Read up on TDS on rental under the income tax legislation.
If I rent a house for residential use, will we pay GST on the rental income?
No, a property is not taxable for GST if you rent it out for domestic use.
Is rent regarded as a taxed supply of goods or services under the GST?
Under the GST, rent is a taxable provision of services.
How much of my revenue from commercial properties is subject to the GST?
The rate of GST on rentals is 18% of the rental revenue for those with yearly incomes of at least Rs 20 lakhs.
What is the rate of GST on commercial property rent if the income from rent is less than Rs 20 lakh?
If the yearly rental revenue is below Rs 20 lakh, GST is not applicable.
What is the TDS on the rental rate?
If the total amount of rent paid or anticipated during the year exceeds Rs. 2.40 lakhs, the Income Tax Act’s current rules require rent payers to hold and deposit 10% of the rent as TDS.