Service Tax on Commercial Property in Force

With the new service tax introduced by the government in the last budget coming into force, commercial property rates have gone up from 1st June.

The 12.6% service tax, including the 3% education cess applies to all
rents on commercial
properties .

Telecom services, asset management, design
services, gas and oil drilling and works contract, and development
and supply of content will also attract the service tax, the first instalment
of which is to be made by July 5.

The tax does not apply to residential properties and properties
rented out to educational, recreational and agricultural purposes.

However, mixed use properties would be subject to tax, as per
the new regulation.

The impact of the tax would be counterbalanced by the deduction
of property tax from the rent, though tenants would be adversely
affected.

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Photo: Black Redstart in Kaziranga National Park March 2025 by Tisha by Tisha Mukherjee, licensed under CC BY-SA 4.0, via Wikimedia Commons.