GST Is Levied On Rent

GST Is Levied On Rent: Those who make a rental income from their properties for business reasons must pay GST. This page goes into detail about numerous facets of this tax burden.

Renting your home is seen as an extension of service under the tax system. The Goods and Services Tax (GST) law, which was implemented in July 2017, now applies to rental revenue. Under the GST framework, rent is now considered a taxable provision of service.


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GST Is Levied On Rent : GST-registered businesses must pay 18% GST when renting corporate residences and guest houses to workers.

The GST Council has removed an exemption formerly provided to rental of residential units under the GST regime, which would increase the cost of supplying business guest homes or staff housing by GST-registered enterprises.

During the modification, which was announced following the 42nd meeting of the GST Council on July 13, 2022 and took effect on July 18, 2022, GST-registered renters would be required to pay GST at 18%, regardless of whether the landlord is GST-registered or not.

The new regulation requires a GST-registered renter to pay GST on rent through the reverse change method and then claim ITC on the payment made.


GST on rent is applicable.

The presence of GST on rent is influenced by two factors:


GST Is Levied On Rent: Type of property

The GST on rent applies to both residential and business buildings rented. Even if a residential property is rented for business reasons, the rental revenue is subject to GST on rent.

It is crucial to note that your GST duty will stay unchanged as long as you have rented out your property for commercial purposes, regardless of the type of its use.

If you rented your residential property for residential reasons to a person who is not registered for GST, GST on rental revenue is not applicable.


GST Is Levied On Rent : Rental income limit

The necessity to pay GST on rent arises under the GST regime when you have an annual rental income of Rs 20 lakhs or more. Previously, this barrier was set at Rs 10 lakhs.


GST Is Levied On Rent : GST rate on rent

If both of the aforementioned circumstances apply. You will be required to pay 18% of your rental revenue as GST on rent.


GST Is Levied On Rent: How do I pay GST on my rent?

If GST on rental income is applicable, the landlord must register and pay the tax.


GST Is Levied On Rent: GST Is Levied On Rent: GST ITC on rent

If you fulfil all of the eligibility requirements, you can claim an input tax credit for GST on rent.



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