GST on Rental Income: When a Landlord Needs to Register

Most landlords learn about GST from a tenant. A company renting their shop asks for a GSTIN, or a tenant's accountant sends a "self-invoice" and the landlord wonders why someone else is issuing invoices for their property. By then the questions are about the past, not the future.

This article is about GST on rent, and about when the landlord, rather than the tenant, has to register. The income-tax side, meaning how rent is taxed as house property income and what you can deduct, is in our house property income guide.

# The map: who pays, in each case

Three sources sit behind that table:

• The exemption for renting of a residential dwelling for use as residence is entry 12 of Notification No. 12/2017-Central Tax (Rate). Since 18 July 2022 it excludes rentals to registered persons. The proprietor carve-out was added by Notification No. 15/2022-Central Tax (Rate), effective 1 January 2023.
• The residential RCM is entry 5AA of Notification No. 13/2017-Central Tax (Rate): renting of a residential dwelling by any person to a registered person.
• The commercial RCM is entry 5AB, inserted by Notification No. 09/2024-Central Tax (Rate) dated 8 October 2024, effective 10 October 2024: renting of any property other than a residential dwelling by an unregistered person to a registered person. Notification No. 07/2025-Central Tax (Rate) took composition taxpayers out of it from 16 January 2025.

# When the landlord must register

Section 22 of the CGST Act requires registration once aggregate turnover in a financial year crosses ₹20 lakh for a supplier of services, or ₹10 lakh in Manipur, Mizoram, Nagaland and Tripura. Renting is a service.

Two parts of the definition of aggregate turnover in Section 2(6) matter for landlords:

1. It includes exempt supplies. Residential rent that carries no GST still counts.
2. It is PAN-wide. All properties, in all States, owned in your name are added together.

Section 23 gives the other half. A person engaged exclusively in supplies that are wholly exempt does not need to register. So a landlord with ₹30 lakh of purely residential rent, all from unregistered tenants living in the flats, stays outside GST. Add one shop and that exemption is gone, and the ₹30 lakh of flat rent now counts towards a threshold the shop rent alone might never have reached.

# Worked examples

All figures are illustrative. GST is at 18%.

# Example 1: one shop, one flat

Rent from a shop let to a GST-registered retailer is ₹1,20,000 a month. Rent from a flat let to a family is ₹50,000 a month.

The shop rent alone is below ₹20 lakh. The flat takes the total over. On the conservative and more common reading, the landlord must register. After registration:

• the shop rent moves from the tenant's RCM to the landlord's forward charge: the landlord invoices ₹1,20,000 + ₹21,600 GST each month and the tenant claims ITC as before;
• the flat rent stays exempt and goes in the return as an exempt supply;
• the landlord can now claim ITC on GST paid for repairs, maintenance and other inputs used for the commercial property.

# Example 2: small shops, unregistered tenants

A landlord owns a row of small shops and earns ₹25,00,000 a year in commercial rent, all from tenants who are not registered under GST.

• There is no RCM, because entry 5AB needs a registered tenant.
• Aggregate turnover is ₹25 lakh, above the threshold, so the landlord must register and charge 18%.
• GST for the year is ₹4,50,000. The tenants cannot claim it as credit, so the real question is whether the leases let you add GST on top of rent. Read the escalation and tax clauses in each lease before registering, not after.

# Example 3: the tenant's side

A GST-registered trading firm pays ₹80,000 a month for an office to an unregistered landlord.

The tenant raises a self-invoice, reports the tax in Table 3.1(d) of GSTR-3B and pays it in cash. RCM liability cannot be paid from the credit ledger. If the office is used for business, the same amount comes back as ITC, so the cost is cash flow and paperwork rather than tax. For a composition tenant, none of this applies from 16 January 2025.

# Once you are registered

• Charge 18% on all commercial rent, to registered and unregistered tenants alike. For a registered landlord, the entry 5AB RCM no longer applies.
• Residential rent to registered tenants stays under the tenant's RCM, because entry 5AA applies "by any person", whether or not the landlord is registered.
• Returns: GSTR-1 and GSTR-3B, monthly or quarterly under QRMP up to ₹5 crore turnover. A nil month still needs a return, and late fees run on nil returns too. See the GSTR-3B guide.
• ITC: available on GST paid on repairs, maintenance, security, lift AMC and professional fees used for the taxable (commercial) letting. Where the same costs also serve exempt residential letting, common credit has to be split, which is the Rule 42 and 43 working. Construction of the building is a blocked credit under Section 17(5).
• Composition is available to a service provider only under the 6% scheme for services. It is rarely a good fit for a landlord whose tenants are businesses wanting ITC. See our composition scheme guide.

Co-owned property. Where a property is jointly owned and each co-owner receives their share of rent, practitioners generally test the threshold co-owner by co-owner, since each is a separate person under GST. That depends on how the lease is drawn and who actually receives the rent. If one person collects everything, confirm the position with your CA before relying on a split.

# Before you sign the next lease

A new tenant can change your GST position overnight, so ask these questions before the agreement is signed, not after the first rent cheque:

1. Is the tenant GST-registered, and under the regular scheme or composition? Ask for the GSTIN and check it on the GST portal. This decides whether the tenant pays under RCM or you do.
2. Is the property residential, and will it be used as a residence? A flat let as an office is not residential letting for GST, whatever the building is called.
3. What does this rent do to your PAN-wide total? Add it to every other rent you receive, exempt residential rent included, and see where the year ends.
4. Does the lease say rent is exclusive of GST? If you may have to register during the lease, a clause that lets you add GST protects your margin.

# The income-tax connections

• GST is not rent. For house property income, the GST you collect and pay over is not part of the rent received.
• TDS on rent is deducted on the rent excluding GST where the GST is shown separately on the invoice. CBDT Circular 23/2017 set this out under the 1961 Act. The TDS provisions on rent now sit in Section 393 of the Income-tax Act, 2025. See the 2026 TDS updates.
• Registering for GST does not by itself make rent business income. Whether rent falls under house property or business depends on the income-tax facts, not on your GST status.

Know your aggregate turnover before a tenant tells you. Track rent by property and tenant type in Income and expense management, and check any new lease with ARTHA before you sign. Start free →

# References (verified 23 September 2026)

1. Notification No. 09/2024-Central Tax (Rate) dated 8 October 2024, entry 5AB (copy of the official notification). https://cdn.taxo.online/wp-content/uploads/2024/10/CTR-09-2024.pdf
2. TaxGuru: Notification No. 5/2017-Central Tax, persons exempt from registration. https://taxguru.in/goods-and-service-tax/cbec-notifies-persons-exempt-obtaining-gst-registration.html
3. Taxscan: CBIC notifies exemption for proprietors renting residential dwellings in a personal capacity (Notification No. 15/2022-Central Tax (Rate)). https://www.taxscan.in/cbic-notifies-gst-exemption-to-proprietors-renting-out-residential-building-in-their-personal-capacity-read-notification/241172
4. TaxGuru: GST on renting of residential and commercial property (entries 5AA and 5AB). https://taxguru.in/goods-and-service-tax/gst-renting-residential-commercial-property.html
5. ClearTax: RCM on rent of commercial property (composition exclusion from 16 January 2025). https://cleartax.in/s/rcm-on-rent-of-commercial-property-under-gst
6. TAXAJ: GST on renting of commercial property by an unregistered landlord, 2026 position (Notification No. 07/2025-Central Tax (Rate)). https://www.taxaj.com/learn/gst-on-renting-of-commercial-property-by-an-unregistered-landlord-rcm/
7. TaxGuru: GST rate changes with effect from 22 September 2025, topic-wise analysis. https://taxguru.in/goods-and-service-tax/gst-rate-w-e-f-22nd-september-2025-topic-wise-analysis.html

Disclaimer: This article is educational and general in nature, current as at 23 September 2026, and based on the CGST Act, the notifications named above and the Income-tax Act, 2025. Whether a landlord must register can turn on the exact mix of tenants, co-ownership arrangements and lease terms, and the Notification No. 5/2017-Central Tax point is a matter of interpretation. Have your position confirmed by a Chartered Accountant before registering or deciding not to. All figures in the examples are illustrative. Data verified 23 September 2026.

Written by

Prabhakar Kumar

Chartered Accountant (ICAI, Nov 2019)

Chartered Accountant (FCA, ICAI) and founder of VittSphere Technologies. Writes on Indian taxation, capital gains, GST and personal finance.