Renting of property – Municipal Taxes to be excluded
While the FM did not relent and stuck to the imposition of service tax on renting of commercial property, the Government has allowed a small concession. For calculating the tax, the property tax paid to local bodies can be deducted from the rent received. However any interest, penalty etc., paid to the municipalities for delayed payment of tax or for any other reason, are not excluded. The property tax has to be computed proportionately, relevant to the period for which the service tax is paid.
Notification No. , Dated May 22, 2007