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Municipal tax deduction

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Nikita Malkan

CA - JOB

37 Points Posted on 29 May 2020

Hi,
A has rented out House property for the period Aug-19 to Mar-20.
Can he claim a deduction for municipal tax he paid for the period Apr-19to Jul-19 when the property was not on rent but was Self occupied?
Or he can only claim Municipal tax paid for Aug to Mar?

Thanks in advance.

Replies (5)

Quick Summary

This discussion clarifies municipal tax deductions for a rental property. The consensus is that you can only claim municipal tax for the period the property was actually let out (August to March), not for the preceding self-occupied period (April to July). While Section 23(3) allows for deductions on municipal taxes paid during the previous year, even if the property was partly self-occupied and partly let out, the deduction is proportional to the letting period.

sukhwani keyur

588 Points Posted on 29 May 2020

Municipal tax shall be divided in proportion to the period of self occupancy and letting period. In your case, he can claim municipal tax deduction only for Aug to March.

shivam garg

47 Points Posted on 29 May 2020

As per Section 23(3) In case where a house property is let out for the part of the year and self occupied for part of the year then the municipal taxes for the whole year is allowed as deduction provided it is paid by the owner during the previous year