Everything You Must Know About GST on Rent

Since the times GST has come into picture, there is lot of confusion about it. To avoid receiving any GST notice, it is important that you are well aware of the tax rates and complications involved in this system. In this post, GST on rent in India has been discussed to bring more clarity on the subject so that you can manage your rental income as a landlord and pay the right amount as rent as a tenant.

Rate of GST on Rental Income

The first and the foremost thing we must understand is that the GST rate for rent is 18%. GST on rental income from commercial property and residential property is not same. This means that GST on rent paid on commercial property is 18% and residential properties have been exempted from this taxation. Therefore, a residential property that is used for residential purpose will only be exempted from GST and the residential property which is not used for residential purpose. For example, if it is a residential property which is being used as an office then in that case the GST will be levied at 18% and otherwise it will be tax-free.

GST Exemptions and Rent Limits

There are different rent limits that affect the GST on rent payments:

  • If the rent along with the services provided by the landlord is under the amount of Rs.20 lakhs and the landlord doesn’t have GST registration then GST on rent payment is exempted. But this limit is Rs.10 lakhs for certain states like Arunachal Pradesh, Assam, Himachal Pradesh, J&K, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Uttarakhand.
  • If any religious place meant for public use, owned by a religious trust or registered charitable trust, then the rent of that place is exempted if room rent is under Rs.1000 per day, shop rent is under Rs. 10,000 per month and rent for a community hall is under Rs. 10,000 per day. In case the rent exceeds the above mentioned amounts then GST will be applicable.

GST on Rent Payment: Important Points to Keep in Mind

  • There are three components of GST i.e. SGST, CGST, IGST
  • In intra-state transactions, SGST and CGST are levied
  • In Inter-state transactions, IGST is levied
  • If landlord is registered in the same state in which the property is also located then CGST and SGST will be levied at 9% each.
  • If landlord is registered in the same state of the property but tenant is registered in a different state then both CGST and SGST, both will be levied.
  • If landlord is registered in a different state and property is in a different state then in that case IGST will be levied at 18%.

So always keep these points in mind as a landlord and also as a tenant to keep things smooth and in synch with GST rules and regulations.

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What are the Reasons for Receiving GST Notices?

The honeymoon period for taxpayers under GST has ended and now strict actions will be taken against those who are not genuine when it comes to filing the GST returns with the department. Now the investigation wing of GST is all gearing up to mark the defaulters and issue notices to them.

There are various reasons because of which one can receive a notice from the department. In this post, we have highlighted different reasons because of which you can receive notices. So stay updated to avoid inviting any such notices and enjoy smooth working of your business.

Why GST Department Sends Notices?

Let us find out why is GST department compelled to send a notice to tax payers:

1. GST Mismatch Notice for Mismatch in Return

If there is any kind of mismatch or difference between different GST returns or there is GST mismatch report then in that case, the department is surely going to send a notice.

  • Discrepancy in GSTR 3B and GSTR 2A

If you are not able to assure that the credit claims made by business are pertaining to the taxes that have been paid by suppliers then in that case you can receive a notice because it is a loss to the government treasury.

  • GST Scrutiny Notices

These notices are issued with a purpose to seek explanation from tax payers for any kind of discrepancies that exist in their GSTR 3B and GSTR 1 of a particular period. The purpose of sending this notice is to ensure that the all the payments of taxed for all the outward supplies have been made.

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2. Not Filing GST Returns on Time

You can invite a notice to yourself from the department if you have failed to file your GST return within the defined time limits. And for being a defaulter, you also attract yourself a penalty which is the interest on your due taxes. Department is getting very strict with timely filing of GST returns and failing to do so can attract a notice.

3. For Verification of Pre-GST Claims

For all the taxpayers who have made pre-GST claims, the department is sending notices to them in order to have them submit supportive documents which prove their transitional credit claims. For that, the defaulters are suppose to submit their stock statements, copies of their purchase documents along with a copy of Tran 1 return to avoid any action.

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7 Indian Income Tax Notices You must know

Whenever we receive an Income Tax notice, we tend to get worried and look for help. Income Tax notice is nothing but a letter seeking clarification on something. If you are a salaried person then not only filing the ITR but also replying to such notices can be done by yourself but if it is a company then things might get complicated and you might need professional assistance. Some are simple income tax notice for not filing the return while some are complex notices for verification of claims.

This post talks about different kinds of Indian Income Tax notices. Read about these Income Tax notice formats for better understanding and to be able to reply to it with ease.

Section 131(1A)

If the department feels that you are concealing your income then you will receive this notice which intimates you that an enquiry on this matter will be initiated and the Assessing Officer will have the authority to impound your books of accounts and other related documents.

Section 139(9)

In this type, the ITR filed is defective for which complete error description is shared along with the probable solution shared by AO for rectification. Duration of 15 days is given to respond from date of intimation or else the ITR gets rejected. You can agree or disagree and respond to the same. For this, you must know all the IT rules to follow.

Section 142(1)

If the return is not filed on time or the AO wants to go through the papers that verify the claims made in ITR, the notice for preliminary enquiry is made. The duration to serve the income tax notice 142(1) is before the end of relevant year of assessment. In case the assessee has not filed the return then time limit is not valid in that scenario.

Section 143(2)

In case the AO is not convinced or the assessee has failed to provide documents against the above mentioned notice then notice u/s 143(2) is send. In this case, AO may ask the assessee to personally attend his office or produce required documents for detailed scrutiny. The duration to serve this notice is before expiry of 6 months from financial year end in which return has been furnished.

Use the template for Income Tax Notice Reply Letter Format Under Section 221(1) to create a personalized format.

Section 148

This type of notice is issued when even after the assessment, AO feels that some part of your income has not been assessed. In this case, the assessee may be asked for filing ITR for relevant assessment or reassessment or re-computation. The duration to serve the notice is 4 years counting from end of relevant assessment year if the amount for income escaped assessment is Rs. 1 lakh. The duration is 6 years if the amount is above Rs. 1 Lakh.

Section 156

This notice is served in case there is any kind of tax or fine or penalty is due from taxpayer. This notice is served mostly after the assessment of the return. The taxpayer is suppose to deposit the dues within duration of 30 days from ITR notice. There is no limit for serving this kind of notice.

Section 245

This type of notice is issued when some kind of tax refund is adjusted against tax demand due from the end of the taxpayer. This is more like an intimation from the department and therefore, it doesn’t have any time limit to serve.

Therefore, always read the notice and understand the section under which it has been issued to have complete clarity on what action you are required to take.

 

Guidelines on Applying for IEC for Commercial Import Export of Goods

IEC Code, also known as Import Export Code is a 10 digits code that is issued by Director General of Foreign Trade. If any person who wishes to start with an export or import business in India has to have this IEC certificate to begin the trading at commercial level.

This post talks about everything you need to know about applying for import export license online.

Documents Required for IE code | Import Export Code Application

Keep the following documents ready for a hassle-free and quick application IEC Application Form, the first three being compulsory for all:

  • PAN Card
  • Photograph of Applicant
  • Bank Certificate Copy
  • Memorandum of Association
  • Extract of Board Resolution
  • RBI Approval Letter if the applicant is an NRI

Some more forms might be required to filled specific to your condition.

Steps for IEC Registration Online

You can very conveniently apply for IED Code for individuals or companies following the steps mentioned below:

  • Go to the website of Director General of Foreign Trade: http://dgft.gov.in/
  • For IEC Registration online, click on “Online Application” and select IEC from the drop down menu
  • Click on Online IEC Application
  • Fill in your PAN details to login
  • Select New IEC Application Details and fill the IEC Application Form along with uploading the documents.
  • Fill in details on branch and director
  • Make online payment for IEC application

Don’t forget to download, save and print the form once the procedure is complete.

Guidelines to Know IEC Application Status

To know IEC code status, here are the steps to follow:

  • Keep the Ecom Ref. No. handy which is on the application print out.
  • Use the Ecom Ref. No. to track the IEC Application status online. You can find this under Query Option.

Just follow these steps and you will have your 10 digit IEC Code to start your export import business with ease.

 

Rights a Daughter Holds in Father’s Property if There is No will

Usually the distribution of property amongst all the sons and daughters is stated very clearly in will to avoid any chaos, confusion or feud later but if the father dies without a will then what is the basis of property distribution after father’s death.

In this post we shall talk about distribution of property after death if there is no will in India in context of daughters.

  • Amendment of 2005

There was a time when only sons were entitled to be the successors of their parents’ property. But after the amendment made in 2005, now daughters can also claim their rights in the property of their father, in case he has died without a will.

  • Equal Rights in Property

The property transfer after father’s death then happens amongst all his children, irrespective of the gender, and his widow, if any. Now daughters possess an equal right at par with sons in their ancestral property.

  • Equal Rights Whether Married or Unmarried

Whether the daughter is married or unmarried, the rights of the daughter in her father’s property will always exist.

  • Rights of Children of Daughter

As per the amendment, the children of the daughter will also possess equal rights in the property of her father.

  • Exception to this Amendment

There is only one exception to this amendment and that is if the father had died before this change was made in 2005 then in that case, this change cannot be enforced.