Service tax on rent of a hospital building

Service tax on rent of a hospital building

We have a 8000 sq feet hospital building sanctioned by municipal corporation nashik as maternity and nursing home we are in process of leasing it to a group of Doctors the rent will be approx 2.5 lacs per month the building as CO owned by 2 brothers and 3 sisters the rent will be shared as follows 40 % each for both brothers & 20% distributed equally between three sisters my question is
Is the rent from Hospital eligible for service tax
Who should pay the tax owners or tenant
Is there any way out to avoid service tax

Asked 8 years ago in Service Tax

Dear Sir,

In the present case service tax land owners will have to collect and deposit the service tax with the service tax authorities. You have to apply for service tax registration number.

If the value of service provided by the service provider is less than 10 lacs in a year then no service tax will be payable. I will check and let u know whether this limit will appliacle jointly to all of you or separately.

Further doctors will deduct TDS @10%.

Please let me know if you have any questions in the above.

Thanks and Regards

CA Abhishek Dugar

Abhishek Dugar

CA, Mumbai

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Is there any exemption for leasing hospital or nursing homes

Asked 8 years ago

No, there is no such exemption.

Abhishek Dugar

CA, Mumbai

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Hello Sir,

Service Tax shall be applicable if the Total amount of Rent exceeds Rs. 10 Lacs throughout the year.

In your case the amount exceeds the basic exemption limit. It is preferred if you try not to avoid service tax as it is not a burden on you and you can very well charge the same to your tenant and pay it off to the Govt.

Trust this clarifies your query.

Feel free to get back/ call back in case of further details.

Thanking You.

Regards,

Rohit R Sharma

BCOM, ACA, LLB - GEN, CERT. FAFP

Rohit R Sharma

CA, Mumbai

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Dear Sir,

There is no such exemption for Hospitals.

Trust this clarifies your query.

Feel free to get back/ call back in case of further details.

Thanking You.

Regards,

Rohit R Sharma

BCOM, ACA, LLB - GEN, CERT. FAFP

Rohit R Sharma

CA, Mumbai

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The rent will be considered as total or as per the share of the co owners as share of the sisters will be far less then 10 lacs per annum will they also need to pay service tax

Asked 8 years ago

The rent will be considered as total or as per the share of the co owners as share of the sisters will be far less then 10 lacs per annum will they also need to pay service tax

Asked 8 years ago

Dear Sir,

The rent will be considered in Totality and not as per the share of owner. In case you want to do it that way then you will have to split the property and then raise separate bills or you can make a sub letting agreement wherein the brothers rent the property to sisters and the sisters in turn rent it to the hospital.

Either or is not advisable as the former is cumbersome and the latter is subject to litigation.

Trust this clarifies your query.

Feel free to get back/ call back in case of further details.

Thanking You.

Regards,

Rohit R Sharma

BCOM, ACA, LLB - GEN, CERT. FAFP

Rohit R Sharma

CA, Mumbai

2104 Answers

95 Consultations

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Talk to Rohit R Sharma

Ideally the rent is considered in totality. However, if brothers and sisters have their separate ownership in the building, then each one of you can enter into separate agreements with doctors.

Please let me know if you have any questions on the above.

Thanks and Regards

CA Abhishek Dugar

Abhishek Dugar

CA, Mumbai

3576 Answers

183 Consultations

4.8 on 5.0

Talk to Abhishek Dugar

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