GST on Rent in India: Residential vs Commercial Property Explained
Is GST applicable on rent in India?
Whether GST applies to rental income depends entirely on two factors: whether the property is residential or commercial, and who the tenant is. This single distinction confuses more landlords and tenants than almost any other GST rule, so it's worth understanding clearly before you sign a lease or raise a rent invoice.
Residential rent for personal use
Renting out a residential property to an individual for personal residential use is exempt from GST entirely — no CGST, SGST, or IGST applies, regardless of the rent amount. This exemption covers the vast majority of home rental arrangements between landlords and tenant-families across India.
Residential property rented to a business (RCM)
The rule changes when a residential property is rented to a GST-registered business entity — for example, a company renting a flat to house an employee, or using it as a registered office. In this case, GST at 18% applies under the Reverse Charge Mechanism (RCM), meaning the registered tenant (not the landlord) is liable to pay the GST directly to the government and can claim it back as Input Tax Credit if eligible.
Commercial rent (offices, shops, warehouses)
Renting out commercial property — office space, retail shops, warehouses, co-working desks — is a taxable supply of service under GST, attracting 18% GST. If the landlord is GST-registered (mandatory once their aggregate rental and other taxable turnover crosses ₹20 lakh), they must charge 18% GST on the rent invoice under forward charge, collect it from the tenant, and remit it to the government. Use the Standard GST Calculator to work out the exact GST-inclusive rent for any commercial lease.
Can tenants claim ITC on rent paid?
A GST-registered business tenant using commercial premises for taxable business activity can generally claim Input Tax Credit on the 18% GST paid on rent, reducing their own output GST liability. Track your position with the ITC Estimator.
Quick reference table
| Scenario | GST Treatment |
|---|---|
| Residential rent to an individual (personal use) | Exempt |
| Residential rent to a registered business | 18% under RCM (tenant pays) |
| Commercial rent (shop, office, warehouse) | 18% under forward charge (landlord charges) |