GST applicability on Rental Income & brief Introduction of Assessments under the Income Tax Act, 1961
Arjuna – Krishna, I have a villa in Maharashtra which is owned by my company and we frequently rented out it to persons in India as well as to foreign nationals. I wanted to know from you about GST applicability if any?
Krishna – Hey Arjuna. You please note down the points in this regards so that once our conversation is over you would able to go through the same and take proper decision based on those points.
- When consideration received as Rent for renting out villa for a day or week or month then it would covered under the definition of supply of services as per Schedule –II of the CGST Act, 2017.
- If aggregate Turnover (TO) of supply of other goods or services exceeds Rs.20 lakhs in a financial year, then such person or company shall mandatorily require to apply for GST Registration.
- In 1st year of registration, transactions after exceeding Rs.20 lakhs would be taxable. All earlier transactions are not taxable.
- For Place of Supply (POS) we must refer IGST Act, 2017. Service provided by way of grant of rights to use immovable property, the POS of such services shall be the location of such immovable property, as provided u/s 12 (3) of the IGST Act, 2017.
- Even if above services provided to a person coming from abroad, POS of such services shall be the location of such immovable property as provided u/s 13(4) of the IGST Act, 2017.
- Applicable rate of GST would be 18%.
Arjuna, I think you would now have better understanding of the relevant GST provisions which would enable you to take right decision.
Arjuna – Yes of course Krishna. Now can you please enlighten me on the different types of Assessments under the Income Tax Act, 1961?
Krishna – Sure Arjuna. I will brief you on that and for your easy of understanding I will provide the information in tabulate form.
| Sr. No. | Section Number | Type of Assessment | Description |
| 1 | 143(1) | Summary Assessment |
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| 2 | 143(3) | Scrutiny Assessment |
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| 3 | 144 | Best judgement Assessment |
a) Assessee doesn’t file an Return of Income b) Assessee doesn’t respond to the Notice received from the Income Tax Department c) Fails to comply with a special audit |
| 4 | 147 | Reassessment |
a) The Assessee has taxable income but has not filed the Return of Income b) After filing the Return of Income, if it us found that an Assessee either understated the income or claimed excessive deductions or allowances c) Assessee failed to furnish information relating to international transactions |
Arjuna, I think now you would have better understanding about the types of assessments under the Income Tax Act, 1961.
Arjuna – Yes of course Krishna. Thank you so much.
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Author Bio
Like the way you explain. You give information in the title name of “Krishna” to ” Arjun” who need to ask him. Excellent.
Thank you so much for your encouraging words.