can we claim deduction of Municiple Tax paid to Tenant

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This query is : Resolved

Amin Jignesh (Querist)

22 January 2009 as per agreement tanent have to bear 50% of municiple tax & tenant has paid 100% of municiple tax but not raised any debit note to owner. Now if he raise a debit note for the municiple tax for 4 years at a time (Including last 3 years) & if owner pays the same to tanent,

CAN OWNER CLAIM DEDUCTION OF MUNICIPLE TAX FROM HOUSE PROPERTY AS HE WILL PAY MUNICIPLE TAX TO TENANT & NOT TO MUNICIPLE AUTHORITY ??????

REVERT URGENTLY

THANKS IN ADVANCE

CA. Aryendra

CA. Aryendra (Expert)

22 January 2009 Deduction will be permissible to the owner in respect of property (Municipal ) taxes is he comply two conditions:

1. Tax should be borned by the assessee;and
2. Amount should be actually paid during the previous year.

Therefore 50% of municipal taxes will not be allow to owner.

K V Subba Rao

K V Subba Rao (Expert)

23 January 2009 Whether Owner of Property makes payment of Property Tax directly to the Municipality or by way of reimbursement to the Tenant makes no difference.

In the instant case, Owner bears 50% of Property Tax as his (Owner) expenditure; so Owner is entitled to claim 50% of Property Tax as expenditure against Income from House Property.

But in respect of previous financial years, Tenant would have claimed the entire amount of Property Tax as his expenditure. This aspect is likely to pose problem. Perhaps both Owner and Tenant have to file revised Returns for previous financial years

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