Deduction of Municipal Tax from Rent

We are Ltd. co. also having rental income from let out of one of property of our company & compay had also paid municipal tax of that property Rs.13500/- during the year 2009-10 out of which Rs. 10,000/- belongs of earlier periods.

Therefore my query is that whether we can deducted the whole amount of M. Tax paid Rs.13500/- of only 3500/-?

Municipal tax deduction is also allowable along with 30% deduction for repair & maintenance u.s.24(a)?

pl. some body reply.

 

 

 

 

 

 

Replies (11)
Dear dipak, Deduction of Municipal taxes is allowed on payment basis u/s 24.. Therefore u can deduct entire 13,500

Mr.Dipak Agarwal

It has been clearly mentioned in the proviso to section 23.  Please go through the section.  You can claim the entire expenditure in the year of payment as Mr.Amir said.

Best Wishes

Sathikonda

Mr.Dipak Agarwal,

Mr Amir is right,as per section 24 muncipal tax deduction is allowed in the year of payment even muncipal tax is related from previous year or comming year but such tax is paid by the owner not by tanent. Therefore, u can deduct entire 13,500 .

you also take benefit of standard deduction @ 30% even if annual value after muncipal deduction is negative.
 

In such a case, You wil have to disallow the municipal tax which is routed to P&L in computing PGBP since it relates to other head..... Or unknowingly u wil claim double deduction....

Have you claimed municipal taxes deduction earler u/s 30 in the previous years??? I am asking cos, you have approached the municipal tax on the same footing as repairs, for which you cannt claim any deduction, and it will also be disallowed in computing PGBP...

 

So the conclusion is that you have to disallow the Municipal taxes and repairs to that property in computing PGBP. MT can be claimed this year fully as Amir, Sathikonda and jitendra have advised, in computing the income from house property.

 

Municipal tax is to be deducted befroe making 30% on the net figure u/s 24.

Agree with AMIR
Agree with AMIR
Agree with AMIR
Agree with AMIR

 
Yes the deduction of municipal tax allowed to Rs.13,500. Bcoz Municipal taxes is allowed on payment basis u/s 24. whether the payment is for the past period, present period or future period.

Yes, the assessee can claim the deduction of municipal tax and standard deduction together as per under section 24(a)

Dear All

Section 24 of Income-tax Act, 1961 does not speak about deduction of muncipal taxes.  Please see section 23 and section 24.

Best Wishes

Sathikonda

hi... if Municipal tax is paid in advance then can we claim for deduction in the same year????

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