Hey friends
Some points must be clear of service tax on rental property.


Budget 2007 proposes to impose service tax on rent from commercial property. Can this service tax be deducted from rental income? Secondly, is the Rs 8 lakh exemption available for only the service tax on property or in the aggregate for all services provided by the service provider?

Service tax is not allowed as a deduction for income from house property. The landlord would in most cases, pass it on by recovering the same from the person taking the property on rent. The Rs 8 lakh exemption is not available separately but in the aggregate for all services provided by the same service provider.

Is the tax on the differential gain (maturity value less issue price) to be paid at the time of maturity OR is it payable every year?

The tax on the gain has to be paid at maturity. Nothing gets added every year to your income. You will have to pay capital gains tax only in the year of sale. Regarding the frequency, a fresh issue is to be launched between the 1st and the 20th of each month. The issue price and consequently the yield will change as per the interest rate environment.
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