Municipal taxes are also called house tax   

If it is actually paid ,then only it is allowed as deduction from GAV 

 

Asssuming no Unrealized Rent

   
Gross Annual Value XX
Less  

Municipal Taxes

(Paid

BY OWNER)

XX
Net Asset Value XX

 

 

Conditions to be fulfilled

1.It should be ACTUALLY PAID  (not payable)

Note : – If only due but not paid then deduction not available

The municipal taxes may be paid of any year (may be of previous period or future period ) .

If Property is in foreign country , than municipal taxes of foreign country is also allowed as deduction

 

2.It should be borne by the owner

Note : – If paid by tenan t or charge from tenant then deduction not available .

 

QUESTIONS

Q1

GAV 500000
Municipal Taxes paid  
   
Current Year Due 10000
Paid by Tenant 6000
Paid by Owner 3000
Bal still Due 1000
Calculate NAV  
   

 

--answer--

Gross Annual Value 500000
Less  
Municipal Taxes 3000
Net Asset Value 497000

Municipal Taxes actually paid by owner allowed as deduction

If not paid or paid by tenant,then not allowed as deduction

--endanswer--

 

Q2

Sove Q1 assuming Municipal taxes paid were of last year

--answer--

Same as of 1 above

Even municipal rent paid of last year allowed as deduction

Gross Annual Value 500000
Less  
Municipal Taxes 3000
Net Asset Value 497000

 

--endanswer--

 

Q3

GAV 500000
Municipal Taxes paid by owner but later recovered from tenant 4000

--answer--

Since municipal  taxes not borne by the owner, therefore not allowed as deduction

Gross Annual Value 500000
Less  
Municipal Taxes 0
   
Net Asset Value 500000

--endanswer--

 

  1. Income Tax
  2. Income From House Property
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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 6 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .
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