GST on Rental Income: Commercial vs Residential Rules & RCM Accounting
GST on Rental Income: Commercial vs Residential Rules & RCM Accounting
Complete tax guide for landlords, property managers, and corporate tenants on 18% GST applicability, ₹20 Lakh registration limits, and residential RCM set-off.
Who is this for: GST Property Real Estate
Quick Answer: How Does GST Apply to Commercial vs Residential Rent?
Commercial property rent attracts 18% GST (Forward Charge if landlord is registered; RCM if landlord is unregistered and tenant is registered). Residential property rented for personal residence is EXEMPT (0%); however, residential property rented to a registered business entity attracts 18% RCM tax.
- Commercial rent registration threshold: Aggregate annual turnover > ₹20 Lakhs.
- Standard tax rate on commercial property rental services is 18%.
- Residential dwelling rented to GST-registered company is taxable under 18% RCM.
- RCM tax paid on residential staff housing has blocked ITC under Section 17(5).
1. Comprehensive Rental Property Tax Matrix
| Property Type & Usage | Tenant Status | GST Rate | Mechanism | ITC Status |
|---|---|---|---|---|
| Commercial Shop/Office | Registered Business | 18% | Forward Charge (FCM) | 100% Eligible |
| Commercial Property (Unregistered Owner) | Registered Business | 18% | Reverse Charge (RCM) | 100% Eligible |
| Residential Flat (Personal Living) | Unregistered Individual | EXEMPT (0%) | None | N/A |
| Residential House (Guest House) | Registered Company | 18% | Reverse Charge (RCM) | BLOCKED Section 17(5) |
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