Is GST applicable on residential house rent?

No. GST is not applicable on rent paid for residential property if it is rented for personal residential occupancy.

Does Reverse Charge Mechanism (RCM) apply to residential house rent?

Yes. Effective from July 18, 2022, if a residential property is rented to a GST-registered business entity (for business use or guest houses), the tenant must pay 18% GST under the Reverse Charge Mechanism (RCM). Personal residential rent paid by individuals remains exempt.

Can I claim Input Tax Credit (ITC) on commercial rent?

Yes, a registered business renting a commercial property (e.g., office, shop, or warehouse) can claim 100% Input Tax Credit on the 18% GST charged on the rent by the landlord, provided they have a valid tax invoice and the property is used for business purposes.

Home All ToolsReal Estate

Property12% GST RateUpdated July 2026

Calculate GST for Real Estate

Calculate GST on commercial property rentals, leasing, and under-construction residential property bookings.

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Quick Summary

HSN/SAC Code#9972

Tax CategoryProperty

ITC EligibilityEligible for commercial rentals, blocked for residential rent and new under-construction bookings under 1%/5% schemes

Effective DateJuly 18, 2022 (Residential RCM rule update)

Applicable Tax

12%

Standard GST RateHSN Code 9972

GST Rate Explanation

Real estate services and property rentals fall under SAC code 9972. Commercial leasing and rentals attract a standard GST rate of 18% (if the landlord is registered). For residential renting, the service is exempt when rented to unregistered individuals for personal use. However, renting residential property to registered business entities attracts 18% GST under the Reverse Charge Mechanism (RCM). Under-construction residential properties are taxed at 1% (affordable housing) or 5% (non-affordable housing) without ITC.

Base Amount (INR)

Calculation Mode

Net Amount (Before Tax)₹10,000.00

CGST (Central Tax) (6.0%)₹600.00

SGST (State Tax) (6.0%)₹600.00

Total GST (12%)₹1,200.00

Gross Amount₹11,200.00

Visual Tax Split & Collection Rules

Intrastate Split Allocation

CGST (Central Tax): 6.0%

SGST (State Tax): 6.0%

Within State (CGST + SGST)

When supply is within the same state (intrastate), the CGST and SGST are collected. The total tax is split 50/50 between Central and State governments.

Across States (IGST)

When supply spans across states (interstate), a single Integrated GST of 12% is collected in full by the Central government before allocation.

GST Rate Structure Slabs

Tax Slab	CGST (Central)	SGST (State)	IGST (Integrated)	Notes
0%	0.0%	0.0%	0.0%	Exempted / Nil rated goods
5%	2.5%	2.5%	5.0%	Essential items & services
12%	6.0%	6.0%	12.0%	Standard reduced rate items
18%	9.0%	9.0%	18.0%	Standard general rate items
28%	14.0%	14.0%	28.0%	Luxury / Sin goods & services

GST Calculation Examples

Monthly commercial shop rent

Add GST (Exclusive)

Formula: Amount + (Amount × Rate%)

Base Amount: ₹50,000.00

GST (12%): ₹6,000.00

Total: ₹56,000.00

Remove GST (Inclusive)

Formula: Amount − (Amount / (1 + Rate%))

Total Amount: ₹50,000.00

Base Amount: ₹44,642.86

GST Included: ₹5,357.14

Under-construction flat payment booking

Add GST (Exclusive)

Formula: Amount + (Amount × Rate%)

Base Amount: ₹40,00,000.00

GST (12%): ₹4,80,000.00

Total: ₹44,80,000.00

Remove GST (Inclusive)

Formula: Amount − (Amount / (1 + Rate%))

Total Amount: ₹40,00,000.00

Base Amount: ₹35,71,428.57

GST Included: ₹4,28,571.43

Frequently Asked Questions

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Government References & Notifications

Tax Disclaimer Notice

Residential renting for personal use is exempt from GST. Commercial property rentals attract 18% GST if the landlord is registered.

Last updated: July 2026