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

Municipal Taxes



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 .




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





Sove Q1 assuming Municipal taxes paid were of last year


Same as of 1 above

Even municipal rent paid of last year allowed as deduction

Gross Annual Value 500000
Municipal Taxes 3000
Net Asset Value 497000




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


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

Gross Annual Value 500000
Municipal Taxes 0
Net Asset Value 500000


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CA Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 13 years. He also provides Accounts Tax GST Training in Delhi, Kerala and online.