House Property Decuction urgent Sir!!!
This query is : Resolved
15 September 2010
Dear Experts,
Very Urgent Sir....
Please tell me whether Water Tax paid by the assessee in case of let out house property can also be claimed as deduction for computing the House Property Income.
As far as i know only Municipal Tax paid for the house is allowed as deduction. Since the Water Tax is also levied by Municipality can we clasiffy it as Municipal Tax and claim deduction?
Thanks for everyone.
With regards,
Rajesh.
Very Urgent Sir....
Please tell me whether Water Tax paid by the assessee in case of let out house property can also be claimed as deduction for computing the House Property Income.
As far as i know only Municipal Tax paid for the house is allowed as deduction. Since the Water Tax is also levied by Municipality can we clasiffy it as Municipal Tax and claim deduction?
Thanks for everyone.
With regards,
Rajesh.
15 September 2010
Proviso to section 23(1) says" taxes levied by local authority in respect of the property shall be deducted". Emphasis is on property and not on local authority. Hence water tax cannot be deducted to arrive annual value.
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15 September 2010
Taxes levied by local authority (Municipal Tax) [Proviso to sec. 23(1)]
Tax levied by the municipality or local authority is deductible from Gross Annual Value (GAV). As per sec. 27(vi), taxes levied by a local authority in respect of any property shall include service taxes levied by such local authority in respect of such property. Municipal tax includes Service taxes like fire tax, water tax, etc. levied by a local authority.
Such taxes shall be computed as a % of Net Municipal Value and allowed as deduction subject to the following conditions:
1. It should be actually paid during the previous year.
2. It must be paid by the assessee.
Stress: Unpaid municipal tax or municipal tax paid by tenant shall not be allowed as deduction.
3. It must be related to the previous year or any year preceding the previous year.
Note: If property is situated in a foreign country, tax paid to foreign local authority shall be allowed as deduction
Tax levied by the municipality or local authority is deductible from Gross Annual Value (GAV). As per sec. 27(vi), taxes levied by a local authority in respect of any property shall include service taxes levied by such local authority in respect of such property. Municipal tax includes Service taxes like fire tax, water tax, etc. levied by a local authority.
Such taxes shall be computed as a % of Net Municipal Value and allowed as deduction subject to the following conditions:
1. It should be actually paid during the previous year.
2. It must be paid by the assessee.
Stress: Unpaid municipal tax or municipal tax paid by tenant shall not be allowed as deduction.
3. It must be related to the previous year or any year preceding the previous year.
Note: If property is situated in a foreign country, tax paid to foreign local authority shall be allowed as deduction
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