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TMI Blogservice tax applicability on property taken by company for accomodation to its employeesX X X X Extracts X X X X X X X X Extracts X X X X ..... Fact: Mr A, director is giving residential property to Co. on rent of ₹ 24 Lacs p.a. The rent paid by Co. is considered as business expenses for which deduction is taken in Income tax. On the other hand Co. has provided the same property to director as rent free accommodation. As we know the renting of residential property for residence purpose is under negative list in service tax. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above case the property is residential in nature but since the property is given to a company so would it fall under the category renting of residential property for the furtherance of business profession ?? - Reply By KASTURI SETHI - The Reply = If residential premises are rented out for business purpose, Service Tax is applicable. - Reply By Ganeshan Kalyani - The Reply = The use of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... house is for residential purpose, but ultimate purpose is to enhance comfort to Director by giving by such free accommodation which has impact on business. thus it is for business purpose. Hence service tax applicable. and if provision is plainly read I.e. renting of immovable property for residential purpose is exempt from service tax. Both possibility is presented here which will help you to ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke suitable call. - Reply By Rajagopalan Ranganathan - The Reply = Sir, It depends on the conditions stipulated in the rental agreement entered into between the Company and Mr.A. If the agreement says that it rented property is going to be utilized for residential purpose then it will not attract service tax. Bur the agreement says that the property can be used by the Company at its discretion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... then it will be treated as rented for commercial purpose and will attract service tax. This is my opinion. - Reply By KASTURI SETHI - The Reply = Yes Sir. There is no doubt the nature of the agreement executed between the Co. and A will be the deciding factor. - Reply By Ganeshan Kalyani - The Reply = Yes I too agree on views submitted by Rajagopalan Sir. - service tax applicability on propert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y taken by company for accomodation to its employees - Query Started By: - shiva kumar Dated:- 21-12-2015 Service Tax - Got 5 Replies - Service Tax - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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