PR Log (Press Release) –
Nov 22, 2008 – With the arrival of MNCs and a revolution in the work culture due to the computerization has increased the demand for well-furnished properties in the country. This trend has drawn the attention of Indian Finance Ministry too. With an aim to broaden the Service tax base, the Finance Ministry, in Budget 2007, proposed to cover several new services under the umbrella of service tax net, and “Renting of Immovable Property” is one of those. The Department intends to gain significant tax revenue from this new service sector. The activity of renting immovable properties for commercial use is taxable with effect from 1st June 2007.
What is Immovable Property?
According to the definition, in all the civil law systems, immovable property is the equivalent of "real property" in common law systems, i.e. it is a piece of a land or any permanent feature or structure above or below the surface. Immovable properties include premises and property rights, houses, land and associated goods and chattels. Immovable properties are located in and always have a fixed address.
As per the Indian Law, Explanation 1 to section 65(105)(zzzz)
states that types of land & building are included in the meaning of “Immovable property” and types of land & building are not included in “Immovable Property” for the purpose of applicability of service tax on its rent.
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Nimisha Sinha
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