FOUNDATION MAGAZINE FINANCIAL ADVICE STOCKLETTERS PORTFOLIO PMS BOOKS
BUY
GST on Housing Society Maintenance and New Changes in Tenancy Act
Moneylife Digital Team 23 July 2019
Economy & Nation
The government is making some changes in taxation for home owners and the security deposit paid by the tenant. While the first will make increase burden on flat owners, the other is expected to provide some relief to tenants.  
 
As per communication from the ministry of finance, home owners, who pay Rs7,500 or more as monthly maintenance charges, will have to pay goods and services tax (GST) at 18% on the amount. Those who pay Rs7,500 and above a month as maintenance charges to the resident welfare association (RWA) for her second home will get an exemption from the GST, the ministry says.
 
RWA or housing societies are mandated to collect GST on monthly charges paid by its members if it exceeds Rs7500 per month and its annual turnover of is more than Rs20 lakh. 
 
For example, if a person has two flats and pays Rs7,500 as maintenance charge for each flat or Rs15,000 as total charges, then the additional Rs7,500 would be exempt from the GST since the exemption is available to each apartment separately. However, if the maintenance charges for a single home or flat is Rs8,500, then GST will be applicable on the entire amount without any deduction. 
 
The government is also making changes in the model tenancy act to secure and balance rights of both the owner and tenant.  
 
Matters like changing rent after a given a period of time, repairing the flat when necessary and most importantly the deposits asked by the tenants are also being taken care in the model act being drafted by the ministry of housing and urban affairs.
 
This act caps the limit of the security deposit to maximum two month’s rent in cases of residency and minimum one month rent in case of non-residential premises. 
 
The other issues pertaining to increasing rent requires valid conditions and reasons like if the owner has incurred any major expenditure.  
 
The draft also emphasized on speedy delivery of justice and speedy adjudication of matters by introducing Rent courts and Rent tribunals. Thereby handing over them the jurisdiction of that of a civil court. 
 
Comments
R Balakrishnan
6 years ago
Societies should bill taxes and insurance separately. But let us wait for the final version after state governments adopt it.
Reply
Deepak Narain
6 years ago
Govt rules and instructions are always couched in complicated language difficult to comprehend. They should make them easy to understand.
Reply
ICICIBank Coral credit cr
  • EDITORS'
    PICKS
  • MOST
    POPULAR
  • MOST
    READ
Free Helpline
Legal Credit
Feedback
Buy Now!

Absolute Power

Inside story of the National Stock Exchange’s amazing success, leading to hubris, regulatory capture and algo scam

View Options

The Scam: Now in it's 12th Printing

29 Years Of The Scam: The Perennial Bestseller, reads like a Thriller!
#Scam92: Read the actual story.

Buy Now Gift Know More

Moneylife Online Magazine

Fiercely independent and pro-consumer information on personal finance.

1-year online access to the magazine articles published during the subscription period.
Access is given for all articles published during the week (starting Monday) your subscription starts. For example, if you subscribe on Wednesday, you will have access to articles uploaded from Monday of that week.
This means access to other articles (outside the subscription period) are not included.
Articles outside the subscription period can be bought separately for a small price per article.

Buy Now Gift Know More

Monthly Digital Access

Fiercely independent and pro-consumer information on personal finance.

30-day online access to the magazine articles published during the subscription period.
Access is given for all articles published during the week (starting Monday) your subscription starts. For example, if you subscribe on Wednesday, you will have access to articles uploaded from Monday of that week.
This means access to other articles (outside the subscription period) are not included.
Articles outside the subscription period can be bought separately for a small price per article.

Buy Now Know More

Full Archive access

Fiercely independent and pro-consumer information on personal finance.
Complete access to Moneylife archives since inception ( till the date of your subscription )

Buy Now

Stockletters in 5 Flavours

Outstanding research that beats mutual funds year after year

Buy Now Know More

MAS: Complete Online Financial Advisory

(Includes Moneylife Online Magazine)

Buy Now Know More
We are listening!
Reset
Success!

To continue

Please

or

With